COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 A PENSION TRUST FUND OF THE STATE OF ARIZONA
PUBLIC SAFETY PERSONNEL ELECTED OFFICIALS’ RETIREMENT SYSTEM RETIREMENT PLAN
#47 #34
PSPRS EORP
CORRECTIONS OFFICER CORRECTIONS OFFICER RETIREMENT PLAN ADMINISTRATIVE OFFICES OF THE COURT
#29 #2
CORP CORP-AOC THIS PAGE INTENTIONALLY BLANK Comprehensive Annual Financial Report
for the following Pension Trust Funds of the State of Arizona
Public Safety Personnel Retirement System
Elected Officials’ Retirement Plan
Corrections Officer Retirement Plan (Administrative Offices of the Courts)
For the Fiscal Year Ended June 30, 2015
Prepared by the Staff of PSPRS
Public Safety Personnel Retirement System 3010 E. Camelback Road, Suite 200 Phoenix, AZ 85016 Phone (602) 255-5575 Fax (602) 255-5572 www.psprs.com
The Purpose of the Public Safety Personnel Retirement System is to provide uniform, consistent, and equitable statewide retirement programs for those who have been entrusted to our care.
This is accomplished through our Governing Principles where
A spirit of Gratitude guides all our actions, thereby fostering a culture of unparalleled service to others through which growth is nurtured, progress is developed, and results are achieved.
Trust is engendered by transparency of our decisions and accountability for our actions as measured against sound expectations.
We recognize that Respect for the individual strengthens the whole and is only earned by genuinely understanding and fulfilling the needs of others through appropriate, timely and clear communication and education. INTRODUCTORY SECTION
TABLE OF CONTENTS
INTRODUCTORY SECTION INVESTMENT SECTION Certificates of Achievement 8 Chief Investment Officer’s Letter 92 Board of Trustees Transmittal Letter 11 Fund Investment Objectives 95 Board of Trustees 18 Investment Performance 95 Executive Staff 19 Asset Allocation 95 Organizational Chart 19 Annualized Trust Rate of Return 96 Professional Advisors 20 Top 10 Investment Holdings 97 Trust Equity Portfolio 97 FINANCIAL SECTION Trust Fixed Income Portfolio 97 Independent Auditor’s Report 22 Summary of Changes in Trust Investment Portfolio 97 Management Discussion & Analysis 24 Schedule of Commissions Paid to Brokers 98 Basic Financial Statements Trust Equity Portfolio 100 Combined Statement of Fiduciary Net Position 36 U.S. Equity Portfolio 100 Combined Statement of Changes in Fiduciary 38 Non U.S. Equity Portfolio 100 Net Position Trust Fixed Income Portfolio 101 Plan Specific Notes to the Financial Statements 41 U.S. Government Securities 101 PSPRS Notes 41 Corporate Bonds 101 PSPRS Summary of Benefits 42 Trust Credit Opportunities Portfolio 102 EORP Notes 50 Trust Private Equity Portfolio 103 EORP Summary of Benefits 51 Trust Absolute Return Portfolio 103 CORP Notes 57 Trust Real Assets Portfolio 104 CORP Summary of Benefits 58 Trust Real Estate Portfolio 104 Combined Notes to the Financial Statements 66 Trust Risk Parity Portfolio 105 Required Supplementary Information 79 Trust GTAA Securities Portfolio 105 Schedules of Funding Progress Health Insurance 79 Trust Investment Management Fees By Asset Class 105 Schedules of Employer Cont. Health Insurance 79 Trust Investment Management Fees By Asset Class 105 Schedules of Pension Contributions 80 (As a percentage of Total) Money Weighted Rate of Return 80 Schedules of Employer Net Pension Liability 81 Schedules of Changes in Employers Net 82 Pension Liabilities Notes to the Required Supplementary Information 84 Supporting Schedules Information 85 Schedule of Changes in Reserve Balances 85 Schedule of Receipts and Disbursements 87 Schedule of Administrative Expenses 88 Schedule of Consultant Expenses 89
4 Comprehensive Annual Financial Report INTRODUCTORY SECTION
TABLE OF CONTENTS (Continued)
ACTUARIAL SECTION STATISTICAL SECTION PSPRS Specific Information 108 Statistical Summary 136 Actuary Certification Letter 108 Changes in Net Plan Position - Pension 137 Actuarial Balance Sheet 111 Changes in Net Plan Position - Health Insurance 138 Summary of Valuation Assumptions 112 Schedules of Revenues by Source 139 Summary of Active Member Data 114 Schedules of Benefits by Type 140 Summary of Inactive Member Data 115 Deductions from Net Position for Benefits and 142 Summary of Retired Member Data 115 Refunds By Type EORP Specific Information 116 Valuation Assets vs. Pension Liabilities 143 Actuary Certification Letter 116 Schedules of Benefits by Type and Range 143 Actuarial Balance Sheet 119 Funding Ratios 144 Summary of Valuation Assumptions 120 Contribution Rates 145 Summary of Active Member Data 122 Benefit Recipients by Location 146 Summary of Inactive Member Data 123 System Membership 146 Summary of Retired Member Data 123 Principal Participating Employers 146 CORP Specific Information 124 Summary of Benefit Increases 147 Actuary Certification Letter 124 Summary of Growth of the System 148 Actuarial Balance Sheet 127 Benefits Payable by Type of Benefit 149 Summary of Valuation Assumptions 128 Average Monthly Benefits and Membership 150 Summary of Active Member Data 130 Ten Year Estimated Contribution Rates 153 Summary of Inactive Member Data 131 Schedules of Changes in Refundable Member 154 Summary of Retired Member Data 131 Reserve Balances Combined Information 132 Schedules of Changes in Employer 162 Solvency Test 132 Reserve Balances and Unfunded AAL Schedule of Experience Gain/Loss 133 Schedules of Changes in Health Insurance 176 Reserve Balances Participating Employers 183
Comprehensive Annual Financial Report 5 THIS PAGE INTENTIONALLY BLANK INTRODUCTORY SECTION INTRODUCTORY SECTION
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Comprehensive Annual Financial Report 9 INTRODUCTORY SECTION
10 Comprehensive Annual Financial Report INTRODUCTORY SECTION
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM Brian P. Tobin, Chairman CORRECTIONS OFFICER RETIREMENT PLAN Gregory Ferguson, Vice Chair ELECTED OFFICIALS' RETIREMENT PLAN Jeff McHenry, Trustee 3010 East Camelback Road, Suite 200 Richard J. Petrenka, Trustee Phoenix, Arizona 85016-4416 Randie A. Stein, Trustee www.psprs.com Administration Lauren W. Kingry, Trustee TELEPHONE: (602) 255-5575 Jared A. Smout Ryan Parham William C. Davis, Trustee FAX: (602) 255-5572 Administrator Chief Investment Officer
December 23, 2015
The Honorable Douglas A. Ducey Governor of the State of Arizona Executive Tower 1700 W. Washington Phoenix, Arizona 85007
Dear Governor Ducey:
The Board of Trustees (Board) of the Public Safety Personnel Retirement System (PSPRS) respectfully submits the forty‐ seventh Comprehensive Annual Financial Report (CAFR) for the PSPRS, the thirty‐fourth for the Elected Officials’ Retire‐ ment Plan (EORP), and the twenty‐ninth for the Corrections Officer Retirement Plan (CORP), (collectively The System) for the fiscal year ended June 30, 2015 (FY’15), in accordance with the provisions of A.R.S. § 38‐848. This is the first year we have consolidated all three CAFR’s into one report.
Financial Information Reporting Under the direction of the Board, the primary responsibility for the integrity and objectivity of this CAFR and related fi‐ nancial data rests with the management of the System. It is a product of the collective efforts of the staff and is intended to provide complete and reliable information that will facilitate the management decision process and serve as a means for determining compliance with the System’s governance and investment policies and legal requirements.
It is the System's policy to have and maintain an effective system of accounting controls. We believe our controls are ade‐ quate to provide reasonable assurance that assets are safeguarded against loss or unauthorized use and to produce the records necessary for the preparation of financial information. There are limits inherent in all systems of internal controls based on the recognition that the costs of such systems should be related to the benefits to be derived. Management be‐ lieves the System's controls provide this appropriate balance.
The System uses the accrual basis of accounting for both revenues and expenses. Contributions to the System are based on principles of level‐cost financing with current service financed as a level percent of payroll on a current basis and prior service amortized as a level percent of payroll over a period of at least twenty but not more than thirty years.
The financial statements were prepared in conformity with generally accepted accounting principles appropriate for gov‐ ernment‐sponsored defined benefit pension plans and have received a “clean” opinion from Heinfeld, Meech & Co., P.C., Certified Public Accountants and auditors for the System. This unmodified opinion can be found at the beginning of the Financial Section. Management believes that all other financial information included in this annual report is consistent with those financial statements.
History and Administration of the System The PSPRS was created on July 1, 1968 by A.R.S. § 38‐841, “for public safety personnel who are regularly assigned hazard‐ ous duty in the employ of the state of Arizona or a political subdivision thereof.” It was joined by the EORP on August 7, 1985 by A.R.S. § 38‐802, when the Judge’s Retirement Plan merged with the previous Elected Officials’ Retirement Plan and is for eligible judges and state, county and local elected officials of participating governmental employer units. Finally, on July 1, 1986 the CORP was added by A.R.S. § 38‐882, for corrections officers, county, city or town detention officers, dispatchers and probation officers. Each were created “to provide a uniform, consistent and equitable statewide program” for their respective eligible members (A.R.S. §§ 38‐810.02, 38‐841 and 38‐900.01).
Comprehensive Annual Financial Report 11 INTRODUCTORY SECTION
The PSPRS and the CORP are agent multiple‐employer defined benefit plans and are administered at the local level by 236 (PSPRS) and 26 (CORP) individual Local Boards in accordance with A.R.S. §§ 38‐847 and 38‐893. As agent‐multiple plans, the assets and liabilities of each individual Local Board are accounted for separately, thereby allowing for individual fund‐ ing levels and employer contribution rates. The EORP is a cost sharing, multiple‐employer defined benefit plan where the Board administers and manages the plan. As such, the assets and liabilities of EORP are pooled for all the employers who share the same funding level and employer contribution rate. The EORP plan was closed to newly elected officials as of January 1, 2014. All the assets of PSPRS, EORP and CORP are pooled for investment purposes only and reside in the PSPRS Trust (Trust), a formal entity created for that express purpose.
Each Local Board for PSPRS and CORP and the Board for EORP determine eligibility for membership, normal retirement benefits based on years of service, the annual benefit accrual rate and final average compensation; they also determine eligibility for disability benefits, survivor benefits for spouses and children, post‐retirement adjustments and health in‐ surance premium subsidies.
The contributions received from and benefits distributed for each local board and EORP are accounted for by the Board through the administrative offices. However, in accordance with A.R.S. § 38‐848, the Board is not responsible for nor has the duty to review the actions or omissions of the individual Local Boards, but does have the discretion to seek review or rehearing (and does so) to protect the System as a whole. Additionally, although not part of a defined benefit plan or the Trust, the Board also administers a separate cancer insurance program for members of PSPRS and CORP.
The System’s Funding Status As of fiscal year‐end, the financial status of each plan stayed relatively the same from the previous year. There are many factors that contribute to changes in the funding levels, some having a greater effect than others. Below is a reconciliation from the previous year to this year showing those contributing factors and their relative effect on the funded status of each plan:
Funded % as of PSPRS EORP CORP
June 30, 2014 50.4% 41.6% 59.0%
Asset Losses (3.1%) (1.6%) (1.8%) Tier 2 1.4% 0.8% 0.8%
Payroll 0.0% 0.0% 0.0% PBI 0.5% 0.8% 1.1%
Other 1.1% (0.5%) 0.1%
June 30, 2015 50.3% 41.1% 59.2%
Asset Losses One of the biggest contributing factors to the funded status are the investment returns. In order to calculate appropriate contribution rates today to pay for future pension liabilities, assumptions must be made about future behavior and one of those assumptions is the long‐term rate of return that will be made on the investments of the Trust. For June 30, 2015, the assumed rate of return was 7.85% where the market rate of return was only 3.68% (net of fees). However, to greatly dampen the volatility of the market, accepted actuarial methods allow for a smoothing of those returns where only one‐ seventh of any year’s investment gain or loss is recognized. As can be seen in the table above, the Trust is continuing to recognize investment losses from 2009 and 2012. Additionally, even though this year’s 3.68% return was acceptable in relation to our peers in a down market, it did not meet the assumed rate, thereby causing the Trust to experience an actu‐ arial investment loss. Fortunately, this is the last year that the Trust will have to account for the substantial 2009 losses in this seven‐year actuarial smoothing methodology.
Permanent Benefit Increase (PBI) The second biggest contributor to the change in the funded status for PSPRS and EORP (third for CORP) is the permanent benefit increase. As part of that pension reform in 2011, changes were made to the permanent benefit increase structure to no longer fund the reserve for future benefit increases. That change was challenged in the courts and ultimately found unconstitutional to where it was reinstated in 2014 for those members retired prior to the effective date of the change (the class identified in the lawsuit). As such, assumptions needed to be made as to the probability to pay out those benefit increases in the future. The reserve for future benefit increases were depleted with the 2014 payout for PSPRS and CORP,
12 Comprehensive Annual Financial Report INTRODUCTORY SECTION but a little bit remained in EORP for 2015. Because this year’s investment return did not exceed the threshold of nine per‐ cent to add to the reserve for an increase, eligible PSPRS and CORP retirees did not receive an increase for June 30, 2015. However, because of the remaining balance in EORP, those eligible retirees received a 1.77% increase and their reserve is now also depleted. Therefore, the gain experienced in this area was due to not having to pay out a PBI for PSPRS and CORP and only having to payout a portion of the assumed amount for EORP.
Tier 2 As a result of pension reform in 2011, a different tier of benefits were created for new hires. Still being relatively young, this change in benefit structure did not have a significant effect on the funding levels, but did have a minimal effect on the employer rates, as shown in the employer rate reconciliation table in the next section.
Payroll Another assumption that must be made is how much payroll will grow to determine expected salaries for future retirees upon which their pensions will be calculated. Payroll growth reflects salary and merit increases, inflation, overtime (for PSPRS only) and any other change in pensionable salary. This payroll growth assumption is determined based on past experience and is revised every five years. The gain that each plan experienced in this area tells us payroll did not grow this past year as expected, thereby decreasing future liabilities and increasing the funding level a requisite amount.
Other This is the combination of all factors other than those listed above and primarily reflect demographic gains and losses (i.e., retirement, turnover, disability, etc. experience that differs from the actuarial assumptions). While this number is small on a combined plan basis, it will vary considerably from employer to employer, especially for employers with a smaller number of members.
Additionally, all of the above factors are further affected by how long it is assumed a person will be receiving these bene‐ fits. National mortality tables are used to make this determination and are also adjusted every five years as part of the aforementioned experience study. Finally, we have to make an assumption on the investment return our portfolio will earn over a long‐term period. Up until 2003, we were using an assumed rate of 9.00%. We have gradually reduced that assumption over the past 12 years to now be at 7.5% as of July 1, 2016. Lowering the assumed earnings rate raises the employer contribution rate to account for that lower investment income.
While the numbers above are presented in the aggregate, it is important to remember that any aggregate number calcu‐ lated for PSPRS and CORP is for comparison purposes only and does not necessarily reflect the most accurate picture of the System. Because PSPRS and CORP are agent multiple‐employer plans, each individual plan has its own funding level. Therefore, a more appropriate representation for PSPRS and CORP is a distribution of those employers by their individual funding status as shown in the following chart:
40 35 30 25 20 15 10
# of Employers 5 0 0‐10% 10‐20% 20‐30% 30‐40% 40‐50% 50‐60% 60‐70% 70‐80% 80‐90% 90‐100% > 100% PSPRS 5 1 9 2029353628141937 CORP 00001945242 Funded Level by # of Employers
Member and Employer Contribution Rates Both PSPRS and CORP experienced about a relative three percent (not three percentage point) increase in their aggregate employer rate as shown in the following reconciliation:
Comprehensive Annual Financial Report 13 INTRODUCTORY SECTION
Rates as of PSPRS EORP CORP June 30, 2014 41.37% 86.54% 18.21%
Asset Losses 0.94% 2.09% 0.51% PBI (0.44%) (1.00%) (0.24%) Tier 2 (0.17%) (0.16%) (0.16%)
Payroll 0.79% 6.32% 0.32% Other 0.12% 1.78% 0.07% June 30, 2015 42.61% 95.56% 18.71%
Member Contribu- 11.65% 13.00% 7.96%
tion Dispatchers
8.41% All Others
All things being equal, the contributing factors are inversely correlated in regards to funding levels and employer contri‐ bution rates. In other words, if it increases the funding level, it will most likely decrease the rate and vice versa. So, the explanations given for the different factors for the funding level changes should hold true for the contribution rate changes for PSPRS and CORP. Because the employer rate is based on the projected payroll base, it should also be under‐ stood that shrinking payrolls will increase the employer rate while the total dollar contribution amount could remain relatively constant.
Again, as with the funding level, the aggregate employer rate could be misinterpreted because each individual plan in PSPRS and CORP has its own employer contribution rate. A distribution graph representing those individual rates is more informative:
100 80 60 40 Employers 20 of
# 0 0‐10% 10‐20% 20‐30% 30‐40% 40‐50% 50‐60% 60‐70% 70‐80% 80‐90% 90‐100% >100% PSPRS 11 79 51 30 22 17 9 7 3 3 1 CORP 7135 2 0 0 0 0 0 0 0 Employer Contribution Rate by # of Employers
The EORP is a different story. When it was closed, the employer contribution rate was statutorily set at 23.5% for all em‐ ployers. The actual contribution rate should be closer to 95%. The plan is unsustainable at this statutory rate and current estimates show that the plan will run out of assets in less than 15 years. To put it into perspective, last year that estimate was 20 years, so we have lost 5 years in just the past year. Additionally, the factors have a more dramatic effect in EORP because of a decreasing payroll base due to the declining membership.
In addition to the changes in the PBI funding mechanism promulgated by SB 1609, the employee contribution rates for PSPRS and EORP had steadily increased since fiscal year 2011‐12 to their current amount as shown in the table. The CORP employee contribution rates did not change during these years. However, these contribution rate increases in PSPRS and EORP also face a legal challenge (Hall) that has secured a Superior Court ruling declaring the changes uncon‐ stitutional on reconsideration. This lawsuit is currently on appeal in the Arizona Supreme Court with oral arguments cur‐ rently set for February 18, 2016.
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Should the plaintiffs ultimately prevail, member contribution rates may be retroactively reset to pre‐SB1609 levels and the previous PBI mechanism could also be made available to eligible active members. Both outcomes will exacerbate the funding levels and increasing employer contribution rates.
FY’15 Investment Results As mentioned previously, all defined benefit plan assets managed by the Board of Trustees are pooled for investment pur‐ poses in accordance with A.R.S. § 38‐848. The FY’15 investment return is 3.68%, net of fees. This is 417 basis points lower than the 7.85% actuarial assumed rate of return, but 98 basis points higher than the 2.70% benchmark return for the Sys‐ tem. Eight of the Trust’s eleven asset classes outperformed their respective benchmark with nine receiving positive re‐ turns for the fiscal year.
The investment strategy for the Trust is one where individual investments are selected based on their return and risk characteristics. The total portfolio risk is guided so as to allow the opportunity to exceed both the assumed rate and the portfolio benchmark (both of which are set by the Board of Trustees in consultation with outside experts), on a regular basis and in a manner which most reliably eliminates the depth and duration of lower or negative investment perform‐ ance periods. The portfolio diversification needed for this conservative strategy has proven to be more secure than and only half as risky as traditional conservative portfolios. This type of strategy continues to attract national interest and serious consideration by our peers who are reevaluating their risk levels.
New Developments and Management Initiatives Our efforts over the past few years to increase communication and education with our Local Boards have been met with great success in helping them to better understand their duties and roles as administrators of their individual plans. Be‐ cause of the increasing employer contribution rates and the heavier burden it has created, we have expanded these out‐ reach efforts to focus more intently on the financial professionals and other decision makers at the local level, to assist with understanding the various components of their employer liabilities. Furthermore, we have begun assessing how we can provide broader, more robust communication channels and clear, concise messaging to those employers, our mem‐ bership, and other interested stakeholders. This includes, but is not limited to, more outreach, website redesign, educa‐ tional sessions and stakeholder meetings, to name a few.
Finally, the Office of the Arizona Auditor General has completed their sunset review and performance audit, which was published on September 18th of this year. Many recommendations for improving the funding status, as well as increasing the level of service being provided to the employers, were given. We are currently in the process of implementing those recommendations. The collaborative relationship we have experienced with the Auditor General and her staff over the past almost two years has been very enlightening and is providing additional insight for more efficiencies and improve‐ ment.
Due to the results of the Fields lawsuit and the possibility of an unfavorable ruling at the Supreme Court in the Hall case, stakeholders have been involved in major discussions this past year to introduce further pension reform measures that, hopefully, garner some significant consensus and withstand legal challenges. The System has been appropriately involved in those discussions by being a resource and providing guidance and plans to lead further discussions in the future. With everyone working together as they have this past year, we are confident that the best solution will be presented.
Conclusion Our goal as the Board of Trustees is to bring every individual plan to at least 100% funded within a reasonable period of time. The closed amortization period, currently 21 years, is designed to pay off the unfunded liabilities over that time so, eventually, the employer is only paying each year’s incremental portion (the normal cost). Some individual plans are al‐ ready only paying the normal cost and others are expected to follow at varying rates.
While the funding horizon has always been the timeframe for reaching a fully funded status, the reversal of certain pen‐ sion reform provisions (and the threat of reversal of others) adds additional stress to employer contribution rates as the System progresses toward its funding goal. However, over the past couple years we have noticed a more concerted effort amongst management, employers and stakeholders to better understand the issues at hand and work together toward a solution. This includes internal and external efforts for increased efficiency, communication and education amongst these groups.
Comprehensive Annual Financial Report 15 INTRODUCTORY SECTION
As members of the Board of Trustees, we intend to continue our efforts to secure the long‐term financial integrity of the System and to faithfully serve the interests of the System’s participants and beneficiaries.
We appreciate the opportunity to serve the State of Arizona, its political subdivisions and System members and we look forward to continuing to serve as Trustees.
16 Comprehensive Annual Financial Report INTRODUCTORY SECTION
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Comprehensive Annual Financial Report 17 INTRODUCTORY SECTION
BOARD OF TRUSTEES (AS OF JUNE 30, 2015)
Brian P. Tobin Gregory Ferguson Chairman Vice Chairman
Jeff Allen McHenry Richard J. Petrenka Randie A. Stein Trustee Trustee Trustee
Lauren W. Kingry William C. Davis Trustee Trustee
18 Comprehensive Annual Financial Report INTRODUCTORY SECTION
EXECUTIVE STAFF AND ORGANIZATIONAL CHART (AS OF JUNE 30, 2015)
Jared A. Smout Ryan Parham Administrator Chief Investment Officer
Comprehensive Annual Financial Report 19 INTRODUCTORY SECTION
PROFESSIONAL ADVISORS
ALBOURNE AMERICA, LLC International Alternative Investment Consultant AVANT STRATEGIES Public Relations Consultant BNY MELLON ASSET SERVICING Independent Investment Advisor CHARLES W. WHETSTINE General Tax Counsel ERNST & YOUNG LLP Investment Consultant FOLEY & LARDNER, LLC Investment Counsel FOSTER PEPPER Investment Counsel GABRIEL ROEDER SMITH & COMPANY Actuary HEINFELD, MEECH & CO. Independent Auditor HIGHGROUND, INC Legislative Liaison INNOVATIVE CREDIT SOLUTIONS Due Dilligence JACKSON WALKER LLP Investment Counsel KUTAK ROCK LLP General Counsel LIGHT STONE SOLUTIONS, LLC Due Diligence NEPC, LLC Independent Investment Advisor OFFICE OF THE ATTORNEY GENERAL General Counsel ORG PORTFOLIO MANAGEMENT LLC Real Estate Consultant OSAM INC. IT Consultant PUBLIC POLICY PARTNERS Legislative Liaison STEPSTONE GROUP LLC Equity Advisors STEPTOE & JOHNSON, LLP Litigation Counsel SUBROSA INVESTIGATIONS Due Dilligence
A schedule of Administrative Consultant fees may be found in the Financial Section. A schedule of Investment Consultant fees, Brokerage Commissions and Research Expense may be found in the Investment Section.
20 Comprehensive Annual Financial Report FINANCIAL SECTION 10120 N. Oracle Road Tucson, Arizona 85704 Tel (520) 742-2611 Fax (520) 742-2718
INDEPENDENT AUDITOR’S REPORT
The Board of Trustees Public Safety Personnel Retirement System
Report on the Financial Statements We have audited the financial statements of Public Safety Personnel Retirement System (System), a component unit of the State of Arizona, which comprise the Combined Statement of Fiduciary Net Position as of June 30, 2015, and the related Combined Statement of Changes in Fiduciary Net Position for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the net position of the Public Safety Personnel Retirement System, as of June 30, 2015, and the respective changes in its net position, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Report on Comparative Combined Information We have previously audited the Public Safety Personnel Retirement System’s 2014 individual plan financial statements, and we expressed unmodified opinions on those plans’ financial statements. In our opinion, the combined comparative information presented herein as of and for the year ended June 30, 2014 is consistent, in all material respects, with the audited individual plan financial statements from which it was derived.
TUCSON • PHOENIX • FLAGSTAFF www.heinfeldmeech.com Emphasis of Matter The financial statements include investments that are not listed on national exchanges or for which quoted market prices are available. These investments include private equity, real estate, credit opportunities, real assets, and other investments. The System is provided alternative sources of information from investment managers and other third parties including audited financial statements, unaudited interim reports, independent appraisals, and other similar information as evidence for the fair value of these investments. Our opinion is not modified with respect to this matter.
Change in Accounting Principle As described in Note 1, the System implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, for the year ended June 30, 2015, which represents a change in accounting principle. Our opinion is not modified with respect to this matter.
Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and the Required Supplementary Information, as listed in the table of contents under the Financial Section, be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information Our audit was conducted for the purpose of forming an opinion on the System’s financial statements. The Introductory Section, Supporting Schedules Information, Investment Section, Actuarial Section and Statistical Section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements.
The Supporting Schedules Information, as listed in the table of contents under the Financial Section, is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supporting Schedules Information is fairly stated in all material respects in relation to the financial statements as a whole.
The Introductory Section, Investment Section, Actuarial Section and Statistical Section have not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2015, on our consideration of the System’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the System’s internal control over financial reporting and compliance.
HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants
December 23, 2015
FINANCIAL SECTION
MANAGEMENT DISCUSSION & ANALYSIS
The System’s discussion and analysis is designed to assist to a full understanding of the data provided in the financial the reader in focusing on significant financial issues, pro‐ statements. The notes can be found immediately following vide an overview of the System’s financial activity, identify The Statement of Plan Net Position and The Statement of changes in the System’s financial position and identify any Changes in Plan Net Position. issues or concerns.
Since the Management’s Discussion and Analysis (MD&A) Required Supplementary Information is designed to focus on the current year’s activities, result‐ The basic financial statements are followed by a section of ing changes and currently known facts, it is intended to be required supplementary information. This section includes read in conjunction with the Transmittal Letter, Financial the Schedule of Funding Progress, Schedule of Contribu‐ Statements and Notes to the Financial Statements. tions, Schedule of Pension Contributions, Schedule of Em‐ ployer's Net Pension Liability, Schedule of Investment Re‐ FINANCIAL HIGHLIGHTS turns, Schedule of Changes in Employer's Net Pension Li‐ Key financial highlights for 2015 are as follows: ability and Related Ratios and Schedule of the Net Pension Liability and Related Ratios for ASRS. · The System had a total rate of return (net of fees) of 3.68% this year. Our total portfolio outperformed the tar‐ The Schedule of Funding Progress get fund benchmark by 98 basis points. This is a decline Shows the ratio of assets as a percentage of the actuarial from the prior year’s return of 13.28%. accrued liability (funding ratio) and the ratio of unfunded · In compliance with the Supreme Court decision regarding actuarial accrued liabilities to member payroll. The trend permanent benefit increase (PBI) payments, the Future in these two ratios provides information about the finan‐ Benefit Increase Reserve was restored effective FY2012 for cial strength of the Trust and the individual Plans within those members who retired effectively on or before July 1, the Trust. Improvement is indicated when the funding 2011. The retroactive funding of the reserves and the in‐ ratio is increasing and the ratio of the unfunded actuarial crease for FY 2014, were depleted with the distribution of accrued liability to payroll is decreasing.
a retroactive PBI increase and PBI for FY2014 effective July The Schedule of Employer Contributions 1, 2014 for PSPRS and CORP. The reserve for EORP was Shows the Annual Required Contributions by fiscal year. depleted in FY2015. The purpose of this schedule is to provide information · PSPRS retirement benefits paid for the current year to‐ about the required contributions of the employers and the taled $679.38 million, compared to $625.68 for the previ‐ extent to which those contributions are being made. The ous year, a 8.58% increase from the prior year. EORP Re‐ information should assist users in understanding the tirement benefits paid totaled $55.41 million for the cur‐ changes and possible reasons for the changes in the Plan’s rent year, compared to $54.94 million for the previous funding status over time. year, a .87% increase from the prior year. CORP retire‐ ment benefits paid for the current year totaled $119.77 Supporting Schedules million, compared to $110.12 million for the previous year, The Supporting Schedules and Other Supplemental Infor‐ a 8.76% increase from the prior year. mation Section includes the Supporting Schedule of Changes in Fund Balance Reserves, Supporting Schedule of OVERVIEW OF THE FINANCIAL STATEMENTS Administrative Expenses and Payments to Consultants, Using this Comprehensive Annual Financial Report (CAFR) and the Supplemental Schedule of Cash Receipts and Cash This annual report consists of a series of financial state‐ Disbursements. The total columns and information pro‐ ments and notes to those financial statements. These vided on these schedules carry forward to the applicable statements are organized so the reader can understand the financial statement. System as an operating entity. The statements and notes then proceed to provide an increasingly detailed look at FINANCIAL ANALYSIS OF THE PLAN specific financial activities. The following schedules present comparative summary financial statements of the System and the individual Plans The Statement of Fiduciary Net Position and The Statement within the Trust for FY2015 and FY2014. Following each of Changes in Fiduciary Net Position schedule is a brief summary of the significant changes These two statements report the System’s net position and noted in these schedules. changes in them using the accrual basis of accounting, which is similar to the accounting used by most private‐ REQUEST FOR INFORMATION sector companies. Net position is the difference between This report is designed to provide a general overview of assets and liabilities, one way to measure the financial the finances of the System and the individual Plans within health, or financial position. Over time, increases or de‐ the System. Questions concerning any of the information creases in the net position are one indicator of the financial provided in this report or requests for additional financial health of the System. information should be addressed to: Public Safety Person‐ Notes to the Financial Statements nel Retirement System, 3010 E. Camelback Road, Suite The notes provide additional information that is essential 200, Phoenix, AZ 85016.
24 Comprehensive Annual Financial Report FINANCIAL SECTION
PSPRS SUMMARY COMPARATIVE STATEMENTS OF FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE PSPRS TOTAL PSPRS TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
Cash and Short-Term Investments 286,022 268,644 14,417 10,702 300,439 279,346 21,093 7.55% Total Receivables 46,476 63,197 1,671 2,588 48,147 65,785 (17,638) -26.81% Total Investments 5,762,830 5,668,551 293,448 278,639 6,056,278 5,947,190 109,088 1.83% Securities Lending Collateral 248,113 425,445 12,634 20,913 260,747 446,358 (185,611) -41.58% Net Capital Assets 3,387 3,488 0 0 3,387 3,488 (101) -2.90%
Total Plan Assets 6,346,828 6,429,325 322,170 312,842 6,668,998 6,742,167 (73,169) -1.09%
Deferred Outflows 549 0 0 0 549 0 549 N/A
Accrued Accounts Payable 1,316 47,364 0 0 1,316 47,364 46,048 97.22% Investment Purchases Payable 16,869 20,992 859 1,032 17,728 22,024 (4,296) -19.51% Securities Lending Collateral 248,113 425,445 12,634 20,913 260,747 446,358 (185,611) -41.58% Employer Net Position Liabilities 4,448 0 0 0 4,448 0 4,448 N/A
Total Plan Liabilities 270,746 493,801 13,493 21,945 284,239 515,746 (231,507) -44.89%
Deferred Inflows (862) 0 0 0 (862) 0 (862) N/A
Net Position 6,075,769 5,935,524 308,677 290,897 6,384,446 6,226,421 158,338 2.54%
Summary Comparative Statements of Fiduciary Net Position Analysis
The total plan net assets held in trust for PSPRS benefits at June 30, 2015 were $6.38 billion, a 2.54% increase from $6.23 billion at June 30, 2014. The increase in net position is primarily due to favorable financial markets during the fiscal year. The increase in cash and receivables is attrib‐ utable to normal fluctuations in investment income receiv‐ ables during the year.
Comprehensive Annual Financial Report 25 FINANCIAL SECTION
EORP SUMMARY COMPARATIVE STATEMENTS OF FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE EORP TOTAL EORP TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
Cash and Short-Term Investments 14,883 12,669 1,058 839 15,941 13,508 2,433 18.01% Total Receivables 3,305 4,382 69 175 3,374 4,557 (1,183) -25.96% Total Investments 292,715 299,599 21,534 21,839 314,249 321,438 (7,189) -2.24% Securities Lending Collateral 12,603 22,486 927 1,639 13,530 24,125 (10,595) -43.92% Net Capital Assets 230 244 0 0 230 244 (14) -5.74%
Total Plan Assets 323,736 339,380 23,588 24,492 347,324 363,872 (16,548) -4.55%
Deferred Outflows 29 0 0 0 29 0 29 N/A
Accrued Accounts Payable 1,360 1,480 0 0 1,360 1,480 (120) -8.11% Investment Purchases Payable 857 1,109 63 81 920 1,190 (270) -22.69% Securities Lending Collateral 12,602 22,486 927 1,639 13,529 24,125 (10,596) -43.92% Employer Net Position Liabilities 231 0 0 0 231 0 231 N/A
Total Plan Liabilities 15,050 25,075 990 1,720 16,040 26,795 (10,755) -40.14%
Deferred Inflows (45) 0 0 0 (45) 0 (45) N/A
Net Position 308,669 314,305 22,598 22,772 331,267 337,077 (5,810) -1.72%
Summary Comparative Statements of Fiduciary Net Position Analysis
The total plan net assets held in trust for EORP benefits at June 30, 2015 were $331.27 million, a 1.72% decrease from $337.08 million at June 30, 2014. The decrease in net position is primarily due to the contribution rate being set at a rate of 23.50% in statute, compared to the actuarial set rate of 57.49%. The increase in cash and receivables is attributable to normal fluctuations in investment income receivables during the year.
26 Comprehensive Annual Financial Report FINANCIAL SECTION
CORP SUMMARY COMPARATIVE STATEMENTS OF FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE CORP TOTAL CORP TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
Cash and Short-Term Investments 58,055 44,047 4,755 3,503 62,810 47,550 15,260 32.09% Total Receivables 4,947 8,711 367 659 5,314 9,370 (4,056) -43.29% Total Investments 1,151,536 1,133,843 96,782 91,187 1,248,318 1,225,030 23,288 1.90% Securities Lending Collateral 49,478 85,099 4,167 6,844 53,645 91,943 (38,298) -41.65% Net Capital Assets 478 490 0 0 478 490 (12) -2.45%
Total Plan Assets 1,264,494 1,272,190 106,071 102,193 1,370,565 1,374,383 (3,818) -0.28%
Deferred Outflows 111 0 0 0 111 0 111 N/A
Accrued Accounts Payable 5,025 3,167 0 0 5,025 3,167 1,858 58.67% Investment Purchases Payable 3,371 4,199 283 338 3,654 4,537 (883) -19.46% Securities Lending Collateral 49,578 85,099 4,167 6,844 53,745 91,943 (38,198) -41.55% Employer Net Position Liabilities 899 0 0 0 899 0 899 N/A
Total Plan Liabilities 58,873 92,465 4,450 7,182 63,323 99,647 (36,324) -36.45%
Deferred Inflows (174) 0 0 0 (174) 0 (174) N/A
Net Position 1,205,558 1,179,725 101,621 95,011 1,307,179 1,274,736 32,443 2.55%
Summary Comparative Statements of Fiduciary Net Position Analysis
The total plan net assets held in trust for CORP benefits at June 30, 2015 were $1.31 billion, a 2.55% increase from $1.27 billion at June 30, 2014. The increase in net position is primarily due to favorable financial markets during the fiscal year. The increase in cash and receivables is attrib‐ utable to normal fluctuations in investment income receiv‐ ables during the year.
Comprehensive Annual Financial Report 27 FINANCIAL SECTION
CORP-AOC SUMMARY COMPARATIVE STATEMENTS OF FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE CORP-AOC TOTAL CORP-AOC TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
Cash and Short-Term Investments 16,097 11,834 354 231 16,451 12,065 4,386 36.35% Total Receivables 1,915 2,897 70 82 1,985 2,979 (994) -33.37% Total Investments 318,694 304,635 7,214 6,020 325,908 310,655 15,253 4.91% Securities Lending Collateral 13,821 22,864 311 452 14,132 23,316 (9,184) -39.39% Net Capital Assets 132 132 0 0 132 132 0 0.00%
Total Plan Assets 350,659 342,362 7,949 6,785 358,608 349,147 9,461 2.71%
Deferred Outflows 32 0 0 0 32 0 32 N/A
Accrued Accounts Payable 1,420 851 0 0 1,420 851 569 66.86% Investment Purchases Payable 933 1,128 21 22 954 1,150 (196) -17.04% Securities Lending Collateral 13,721 22,864 311 452 14,032 23,316 (9,284) -39.82% Employer Net Position Liabilities 257 0 0 0 257 0 257 N/A
Total Plan Liabilities 16,331 24,843 332 474 16,663 25,317 (8,654) -34.18%
Deferred Inflows (50) 0 0 0 (50) 0 (50) N/A
Net Position 334,309 317,519 7,617 6,311 341,926 323,830 18,096 5.59%
Summary Comparative Statements of Fiduciary Net Position Analysis
The total plan net assets held in trust for CORP‐AOC bene‐ fits at June 30, 2015 were $341.91 million, a 5.59% in‐ crease from $323.83 million at June 30, 2014. The increase in net position is primarily due to favorable financial mar‐ kets during the fiscal year. The increase in cash and re‐ ceivables is attributable to normal fluctuations in invest‐ ment income receivables during the year.
28 Comprehensive Annual Financial Report FINANCIAL SECTION
PSPRS SUMMARY COMPARATIVE STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE PSPRS TOTAL PSPRS TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
ADDITIONS Total Contributions and Service Purchase 612,890 565,868 21,481 19,534 634,371 585,403 48,968 8.36% Net Investment Income (Loss) 216,286 723,428 10,810 33,753 227,096 757,181 (530,085) -70.01% Service Transfers 364 775 0 0 364 775 (411) -53.05%
Total Additions (Reductions) 829,540 1,290,071 32,291 53,287 861,831 1,343,359 (481,528) -35.85%
DEDUCTIONS Benefits 665,138 612,105 14,242 13,578 679,380 625,683 53,697 8.58% Service Transfers and Refunds 13,921 14,485 0 0 13,921 14,485 (564) -3.89% Administrative Expenses 5,387 5,826 269 0 5,656 5,826 (170) -2.92%
Total Deductions 684,446 632,416 14,511 13,578 698,957 645,994 52,963 8.20%
Prior-Period Adjustment (4,849) 0 0 0 (4,849) 0 (4,849) N/A
Net Increase (Decrease) 140,245 657,655 17,780 39,709 158,025 697,364 (539,339) -77.34%
Balance Beginning of Year - July 1 5,935,524 5,277,869 290,897 251,188 6,226,421 5,529,057 697,364 12.61%
Balance End of Year - June 30 6,075,769 5,935,524 308,677 290,897 6,384,446 6,226,421 158,025 2.54%
Summary Comparative Statements of Changes in Plan Fiduciary Net Position Analysis
Employer and employee contributions for FY2015 in‐ creased $48.97 million due to increased employee and em‐ ployer contribution rates during fiscal year 2015. For FY2015, PSPRS recognized a net investment gain of $227.10 million which compares to a $757.18 million gain in the previous year. This 70.01% decrease was due to lower returns in the financial markets during the fiscal year.
Deductions from the PSPRS net assets held in trust for benefits consist primarily of pension, disability, survivor benefits, member refunds and administrative expenses. For FY 2015, the benefit deductions totaled $679.38 mil‐ lion, an increase of 8.58% from the $625.68 million paid during FY 2014. Refunds and service transfers decreased $564 thousand over the prior year which equates to a de‐ crease of 3.89%. Refunds represent a return of contribu‐ tions held on account when a member leaves employment. Administrative expenses decreased 2.92%.
PSPRS had a prior period adjustment of $4.85 million due to GASB employer pension requirements.
Comprehensive Annual Financial Report 29 FINANCIAL SECTION
EORP SUMMARY COMPARATIVE STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE EORP TOTAL EORP TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
ADDITIONS Total Contributions and Service Purchase 38,438 38,835 0 1,072 38,438 39,907 (1,469) -3.68% Net Investment Income (Loss) 11,075 38,905 804 2,663 11,879 41,568 (29,689) -71.42% Service Transfers 26 99 0 0 26 99 (73) -73.74%
Total Additions (Reductions) 49,539 77,839 804 3,735 50,343 81,574 (31,231) -38.29%
DEDUCTIONS Benefits 54,453 53,984 957 951 55,410 54,935 475 0.86% Service Transfers and Refunds 173 178 0 0 173 178 (5) -2.81% Administrative Expenses 298 316 22 0 320 316 4 1.27%
Total Deductions 54,924 54,478 979 951 55,903 55,429 474 0.86%
Prior-Period Adjustment (251) 0 0 0 (251) 0 (251) N/A
Net Increase (Decrease) (5,636) 23,361 (175) 2,784 (5,811) 26,145 (31,956) -122.23%
Balance Beginning of Year - July 1 314,305 290,944 22,773 19,989 337,078 310,933 26,145 8.41%
Balance End of Year - June 30 308,669 314,305 22,598 22,773 331,267 337,078 (5,811) -1.72%
Summary Comparative Statements of Changes in Plan Fiduciary Net Position Analysis
Employer and employee contributions for FY2015 de‐ creased $1.47 million during fiscal year 2015 due to the closing of the EORP plan to new members. For FY2015, EORP recognized a net investment gain of $11.88 million which compares to a $41.57 million gain in the previous year. This 71.42% decrease was due to lower returns in the financial markets during the fiscal year.
Deductions from the EORP net assets held in trust for benefits consist primarily of pension, disability, survivor benefits, member refunds and administrative expenses. For FY 2015, the benefit deductions totaled $55.41 million, an increase of 0.86% from the $54.94 million paid during FY 2014. Refunds and service transfers decreased $5 thou‐ sand over the prior year which equates to a decrease of 2.81%. Refunds represent a return of contributions held on account when a member leaves employment. Adminis‐ trative expenses increased 1.27%.
EORP had a prior period adjustment of $251 thousand due to GASB employer pension requirements.
30 Comprehensive Annual Financial Report FINANCIAL SECTION
CORP SUMMARY COMPARATIVE STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE CORP TOTAL CORP TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
ADDITIONS Total Contributions and Service Purchase 109,313 105,317 6,209 5,477 115,522 110,794 4,728 4.27% Net Investment Income (Loss) 43,281 145,434 3,563 10,977 46,844 156,411 (109,567) -70.05% Service Transfers 24 44 0 0 24 44 (20) -45.45%
Total Additions (Reductions) 152,618 250,795 9,772 16,454 162,390 267,249 (104,859) -39.24%
DEDUCTIONS Benefits 97,252 91,320 3,074 2,728 100,326 94,048 6,278 6.68% Service Transfers and Refunds 27,462 29,569 0 0 27,462 29,569 (2,107) -7.13% Administrative Expenses 1,086 1,143 89 0 1,175 1,143 32 2.80%
Total Deductions 125,800 122,032 3,163 2,728 128,963 124,760 4,203 3.37%
Prior-Period Adjustment (986) 0 0 0 (986) 0 (986) N/A
Net Increase (Decrease) 25,832 128,763 6,609 13,726 32,441 142,489 (110,048) -77.23%
Balance Beginning of Year - July 1 1,179,726 1,050,963 95,012 81,285 1,274,738 1,132,248 142,490 12.58%
Balance End of Year - June 30 1,205,558 1,179,726 101,621 95,011 1,307,179 1,274,737 32,442 2.54%
Summary Comparative Statements of Changes in Plan Fiduciary Net Position Analysis
Employer and employee contributions for FY2015 in‐ creased $4.73 million due to increased employee and em‐ ployer contribution rates during fiscal year 2015. For FY 2015, CORP recognized a net investment gain of $46.84 million which compares to a $156.41 million gain in the previous year. This 70.05% decrease was due to lower re‐ turns in the financial markets during the fiscal year.
Deductions from the PSPRS net assets held in trust for benefits consist primarily of pension, disability, survivor benefits, member refunds and administrative expenses. For FY 2015, the benefit deductions totaled $100.33 mil‐ lion, an increase of 6.68% from the $94.05 million paid during FY 2013. Refunds and service transfers decreased $2.11 million over the prior year which equates to an de‐ crease of 7.13%. Refunds represent a return of contribu‐ tions held on account when a member leaves employment. This increase is due to current economic conditions that have led to layoffs and reduction of many governmental services. Administrative expenses increased 2.80%.
CORP had a prior period adjustment of $986 thousand due to GASB employer pension requirements.
Comprehensive Annual Financial Report 31 FINANCIAL SECTION
CORP-AOC SUMMARY COMPARATIVE STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION (IN THOUSANDS)*
PENSION HEALTH INSURANCE CORP-AOC TOTAL CORP-AOC TOTAL
2015 2014 2015 2014 2015 2014 CHANGE % CHANGE
ADDITIONS Total Contributions and Service Purchase 26,175 24,684 1,378 1,204 27,553 25,888 1,665 6.43% Net Investment Income (Loss) 11,804 37,419 251 687 12,055 38,106 (26,051) -68.36% Service Transfers 155 253 0 0 155 253 (98) -38.74%
Total Additions (Reductions) 38,134 62,356 1,629 1,891 39,763 64,247 (24,484) -38.11%
DEDUCTIONS Benefits 19,131 15,768 318 309 19,449 16,077 3,372 20.97% Service Transfers and Refunds 1,651 1,377 0 0 1,651 1,377 274 19.90% Administrative Expenses 293 294 6 0 299 294 5 1.70%
Total Deductions 21,075 17,439 324 309 21,399 17,748 3,651 20.57%
Prior-Period Adjustment (269) 0 0 0 (269) 0 (269) N/A
Net Increase (Decrease) 16,790 44,917 1,305 1,582 18,095 46,499 (28,404) -61.09%
Balance Beginning of Year - July 1 317,519 272,602 6,312 4,729 323,831 277,331 46,500 16.77%
Balance End of Year - June 30 334,309 317,519 7,617 6,311 341,926 323,830 18,096 5.59%
Summary Comparative Statements of Changes in Plan Fiduciary Net Position Analysis
Employer and employee contributions for FY2015 in‐ creased $1.67 million due to increased employee and em‐ ployer contribution rates during fiscal year 2015. For FY 2015, CORP‐AOC recognized a net investment gain of $12.06 million which compares to a $38.11 million gain in the previous year. This 68.36% decrease was due to lower returns in the financial markets during the fiscal year.
Deductions from the CORP‐AOC net assets held in trust for benefits consist primarily of pension, disability, survivor benefits, member refunds and administrative expenses. For FY 2015, the benefit deductions totaled $19.45 million, an increase of 20.97% from the $16.08 million paid during FY 2014. Refunds and service transfers increased $274 thousand over the prior year which equates to 19.90%. Refunds represent a return of contributions held on ac‐ count when a member leaves employment. Administrative expenses increased 1.70%.
CORP‐AOC had a prior period adjustment of $269 thou‐ sand due to GASB employer pension requirements.
32 Comprehensive Annual Financial Report FINANCIAL SECTION
INVESTMENT ACTIVITIES
ASSET ALLOCATION JUNE 30, 2015
3.76% 3.85% 15.61%
U.S. Equity 9.93% Non-U.S. Equity Private Equity Fixed Income 7.99% Credit Opps 14.30% Absolute Return GTAA
Real Assets 9.73% Real Estate Risk Parity 14.38% Short Term 4.07%
8.78% 7.60%
During FY2007 the Board of Trustees adopted a more di‐ The FY2015 rate of return for the System’s fixed income versified asset allocation policy and began an asset man‐ securities was 2.19% versus a benchmark rate of return of agement restructuring that has been deployed over the ‐7.09%. The benchmarks for both equities and fixed in‐ past six years. As illustration, at the end of FY2007, 72.8% come securities are representative of the returns that of the entire investment portfolio was invested in equities could be expected in a similar investing environment. versus 29.91% at the end of FY2015. Fixed income had More detailed information regarding the Trust’s invest‐ remained about 19% of the entire portfolio prior to being ment portfolio can be found in the investment section of reduced to 7.60% in FY2015. However, alternative invest‐ this report. ments have increased from 3.5% in FY2007 to 58.64% in FY2015. The System earns additional income by lending investment securities to brokers. This was done on a pooled basis by At June 30, 2015, the System held $3.69 billion in equities. our custodial bank (BNY Mellon Bank). The brokers pro‐ The FY2015 rate of return for the System’s equities was vide collateral and generally use the borrowed securities 1.17% versus a benchmark rate of return of 1.36%. At June to cover short trades and failed trades. 30, 2015, the System held $633.71 million in fixed income securities.
Comprehensive Annual Financial Report 33 FINANCIAL SECTION
HISTORICAL TRENDS
PSPRS 100.0% FUNDING RATIO 90.0% 77.0% 80.0% 68.2% 66.4% 66.5% 65.8% 70.0% 61.9% 58.6% 57.1% 60.0% 50.4% 50.3% 50.0%
40.0%
30.0%
20.0%
10.0%
0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EORP 100.0% 89.9% FUNDING RATIO 90.0% 76.6% 80.0% 74.6% 71.3% 66.7% 70.0% 62.1% 58.4% 55.5% 60.0%
50.0% 41.6% 41.0% 40.0%
30.0%
20.0%
10.0%
0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CORP 100.0% 93.7% FUNDING RATIO 86.8% 90.0% 84.6% 82.6% 80.3% 80.0% 73.0% 67.8% 66.9% 70.0% 59.0% 59.2% 60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
34 Comprehensive Annual Financial Report FINANCIAL SECTION
THIS PAGE INTENTIONALLY BLANK
Comprehensive Annual Financial Report 35 FINANCIAL SECTION
COMBINED STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2015 WITH COMPARATIVE TOTALS FOR 2014
PSPRS PSPRS EORP EORP CORP PENSION HEALTH INS PENSION HEALTH INS PENSION ASSETS Cash and Short-Term Investments 286,022,048 14,417,362 14,882,783 1,057,974 58,055,491 RECEIVABLES Member Contributions 5,429,076 0 216,041 0 453,478 Employer Contributions 14,763,066 0 430,052 0 704,352 Health Insurance Contributions 0 727,059 0 0 0 Court Fees 0 0 684,590 0 0 Interest and Dividends 5,613,638 278,846 285,160 20,462 1,122,216 Investment Sales 12,936,687 658,746 657,100 48,340 2,585,026 Other 7,733,833 6,665 1,031,846 480 81,444 Total Receivables 46,476,300 1,671,316 3,304,789 69,282 4,946,516 INVESTMENTS AT FAIR VALUE (NOTES 8,9) U.S. Equity 904,004,857 46,032,653 45,917,627 3,377,963 180,639,467 Non U.S. Equity 856,590,072 43,618,254 43,509,260 3,200,790 171,164,980 GTAA 588,714,003 29,977,790 29,902,881 2,199,827 117,637,624 Fixed Income 458,751,019 23,359,970 23,301,598 1,714,199 91,668,246 Credit Opportunities 530,831,860 27,030,385 26,962,841 1,983,541 106,071,537 Private Equity 868,628,142 44,231,242 44,120,717 3,245,772 173,570,443 Real Assets 482,783,756 24,583,736 24,522,307 1,804,001 96,470,499 Real Estate 600,256,250 30,565,530 30,489,152 2,242,957 119,944,011 Absolute Return 246,075,225 12,530,348 12,499,037 919,501 49,171,082 Risk Parity 226,194,684 11,518,015 11,489,233 845,214 45,198,526 Total Investments 5,762,829,868 293,447,923 292,714,653 21,533,765 1,151,536,415 Securities Lending Collateral 248,112,731 12,634,099 12,602,529 927,114 49,478,434 CAPITAL ASSETS (NOTE 10) Land 495,436 0 33,145 0 67,819 Building 3,719,420 0 250,653 0 512,230 Furniture, Fixtures & Equipment 1,318,387 0 118,001 0 192,970 Total Capital Assets 5,533,243 0 401,799 0 773,019 Accumulated Depreciation (2,146,693) 0 (171,611) 0 (294,601) Net Capital Assets 3,386,550 0 230,188 0 478,418 Deferred Outflows 549,128 0 28,493 0 110,953
TOTAL PLAN ASSETS 6,347,376,625 322,170,700 323,763,435 23,588,135 1,264,606,227 LIABILITIES Accrued Accounts Payable 1,315,722 0 1,360,096 0 5,025,221 Investment Purchases Payable 16,869,157 858,991 856,845 63,034 3,370,818 Securities Lending Collateral 248,112,731 12,634,099 12,602,529 927,114 49,578,219 Employer Net Pension Liabilities (NOTE 15) 4,448,340 0 230,816 0 898,795 Total Plan Liabilities 270,745,950 13,493,090 15,050,286 990,148 58,873,053 Deferred Inflows 861,955 0 44,725 0 174,159 NET POSITION HELD IN TRUST FOR PENSION AND HEALTH INS BENEFITS 6,075,768,720 308,677,610 308,668,424 22,597,987 1,205,559,015 NET POSITION RESERVES Refundable Members’ Reserve 1,345,966,186 0 55,947,367 0 326,134,012 Employers’ Reserve 4,729,802,534 0 252,721,057 0 879,425,003 Health Insurance Reserve 0 308,677,610 0 22,597,987 0 Future Benefit Increase Reserve 0 0 0 0 0 Total Net Position Reserves 6,075,768,720 308,677,610 308,668,424 22,597,987 1,205,559,015
* The accompanying notes are an integral part of these financial statements.
36 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED STATEMENT OF FIDUCIARY NET POSITION (cont) JUNE 30, 2015 WITH COMPARATIVE TOTALS FOR 2014 2015 2014 SYSTEM SYSTEM CORP CORP-AOC CORP-AOC COMBINED COMBINED HEALTH INS PENSION HEALTH INS TOTAL TOTAL ASSETS Cash and Short-Term Investments 4,754,977 16,096,889 354,415 395,641,939 352,470,088 RECEIVABLES Member Contributions 0 305,734 0 6,404,329 6,150,101 Employer Contributions 0 560,729 0 16,458,199 16,453,446 Health Insurance Contributions 55,859 0 46,663 829,581 835,943 Court Fees 0 0 0 684,590 682,629 Interest and Dividends 91,966 310,579 6,855 7,729,722 7,416,575 Investment Sales 217,260 715,420 16,194 17,834,773 44,954,542 Other 2,196 22,540 164 8,879,168 6,198,620 Total Receivables 367,281 1,915,002 69,876 58,820,362 82,691,856 INVESTMENTS AT FAIR VALUE (NOTES 8,9) U.S. Equity 15,181,987 49,992,956 1,131,602 1,246,279,112 1,338,792,127 Non U.S. Equity 14,385,696 47,370,841 1,072,250 1,180,912,143 1,131,099,809 GTAA 9,886,947 32,556,853 736,932 811,612,857 741,514,435 Fixed Income 7,704,330 25,369,686 574,249 632,443,297 766,789,526 Credit Opportunities 8,914,866 29,355,875 664,477 731,815,382 714,557,053 Private Equity 14,587,865 48,036,566 1,087,319 1,197,508,066 1,081,812,939 Real Assets 8,107,940 26,698,736 604,332 665,575,307 555,866,439 Real Estate 10,080,790 33,195,158 751,380 827,525,228 873,820,740 Absolute Return 4,132,623 13,608,365 308,028 339,244,209 318,148,555 Risk Parity 3,798,746 12,508,938 283,143 311,836,499 281,912,376 Total Investments 96,781,790 318,693,974 7,213,712 7,944,752,100 7,804,313,999 Securities Lending Collateral 4,166,841 13,820,827 310,579 342,053,154 585,741,320 CAPITAL ASSETS (NOTE 10) Land 0 18,769 0 615,169 615,169 Building 0 141,762 0 4,624,065 4,624,065 Furniture, Fixtures & Equipment 0 53,406 0 1,682,764 1,559,373 Total Capital Assets 0 213,937 0 6,921,998 6,798,607 Accumulated Depreciation 0 (81,532) 0 (2,694,437) (2,444,216) Net Capital Assets 0 132,405 0 4,227,561 4,354,391 Deferred Outflows 0 31,784 0 720,358 0 TOTAL PLAN ASSETS 106,070,889 350,690,881 7,948,582 8,746,215,474 8,829,571,654 LIABILITIES Accrued Accounts Payable 0 1,420,476 0 9,121,515 52,863,040 Investment Purchases Payable 283,303 932,892 21,116 23,256,156 28,900,558 Securities Lending Collateral 4,166,841 13,721,042 310,579 342,053,154 585,741,320 Employer Net Pension Liabilities (NOTE 15) 0 257,475 0 5,835,426 0 Total Plan Liabilities 4,450,144 16,331,885 331,695 380,266,251 667,504,918 Deferred Inflows 0 49,891 0 1,130,730 0 NET POSITION HELD IN TRUST FOR PENSION AND HEALTH INS BENEFITS 101,620,745 334,309,105 7,616,887 8,364,818,493 8,162,066,736 NET POSITION RESERVES Refundable Members’ Reserve 0 82,383,224 0 1,810,430,789 1,699,305,150 Employers’ Reserve 0 251,925,881 0 6,113,874,475 6,041,040,548 Health Insurance Reserve 101,620,745 0 7,616,887 440,513,229 414,993,297 Future Benefit Increase Reserve 0 0 0 0 6,727,741 Total Net Position Reserves 101,620,745 334,309,105 7,616,887 8,364,818,493 8,162,066,736
* The accompanying notes are an integral part of these financial statements.
Comprehensive Annual Financial Report 37 FINANCIAL SECTION
COMBINED STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30, 2015 WITH COMPARATIVE TOTALS FOR 2014
PSPRS PSPRS EORP EORP CORP PENSION HEALTH INS PENSION HEALTH INS PENSION ADDITIONS Contributions Members’ Contributions (NOTES 2,11) 154,359,120 0 8,471,736 0 42,816,526 Employers’ Contributions (NOTES 2,11) 445,332,135 0 15,314,839 0 65,768,453 Health Insurance Contributions (NOTES 2,11) 0 21,480,853 0 0 0 Non-Employer Entity Contributions (NOTE 11) 0 0 5,000,000 0 0 Court Fees 0 0 8,285,993 0 0 Members’ Service Purchase 10,432,945 0 642,052 0 479,413 Legacy Contributions 0 0 607,432 0 0 Alternate Employer Contributions 2,765,422 0 115,790 0 248,348 Total Contributions 612,889,622 21,480,853 38,437,842 0 109,312,740
Investment Income From Investing Income Net Appreciation(Depreciation) in Market Value of Inv. (NOTE 8) 178,078,342 8,900,651 9,064,255 657,692 35,737,172 Interest 3,944,859 197,171 203,415 14,760 788,491 Dividends 39,658,369 1,982,191 2,034,552 147,625 7,930,788 Other Income 89,758,860 4,486,297 4,625,289 335,606 17,893,282
From Securities Lending Activities Security Lending Activities (NOTE 9) Securities Lending Income 648,182 32,397 33,193 2,408 129,626 Borrower Rebates 1,437,206 71,834 73,598 5,340 287,418 Agents Share of Income (312,243) (15,606) (15,990) (1,160) (62,444) Net Securities Lending Income 1,773,145 88,625 90,801 6,588 354,600
Total Investment Income (Loss) 313,213,575 15,654,935 16,018,312 1,162,271 62,704,333
Less Investment Expense (96,927,843) (4,844,615) (4,943,422) (358,689) (19,423,043) Net Investment Income (Loss) 216,285,732 10,810,320 11,074,890 803,582 43,281,290
Transfers Into System 364,593 0 25,862 0 24,172 Total Additions 829,539,947 32,291,173 49,538,594 803,582 152,618,202
DEDUCTIONS Pension Benefits (NOTE 1) 560,333,924 0 54,453,000 0 95,459,795 DROP Benefits (NOTE 1) 104,804,268 0 0 0 1,791,906 Health Insurance Subsidy 0 14,242,152 0 956,773 0 Refunds To Terminated Members (NOTE 1) 13,897,612 0 173,427 0 26,757,384 Administrative Expenses 5,386,939 268,720 297,535 21,589 1,085,719 Transfers To Other Plans 23,119 0 0 0 704,263 Total Deductions 684,445,862 14,510,872 54,923,962 978,362 125,799,067 Prior-Period Adjustment 4,849,493 0 250,518 0 986,044
NET INCREASE (DECREASE) 140,244,592 17,780,301 (5,635,886) (174,780) 25,833,091 NET POSITION HELD IN TRUST Beginning of Year, July 1 5,935,524,128 290,897,309 314,304,310 22,772,767 1,179,725,924 End of Year, June 30 6,075,768,720 308,677,610 308,668,424 22,597,987 1,205,559,015
* The accompanying notes are an integral part of these financial statements.
38 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED STATEMENT OF CHANGES IN FIDUCIARY NET POSITION (cont) FOR THE YEAR ENDED JUNE 30, 2015 WITH COMPARATIVE TOTALS FOR 2014 2015 2014 SYSTEM SYSTEM CORP CORP-AOC CORP-AOC COMBINED COMBINED HEALTH INS PENSION HEALTH INS TOTAL TOTAL ADDITIONS Contributions Members’ Contributions (NOTES 2,11) 0 9,302,982 0 214,950,364 201,741,248 Employers’ Contributions (NOTES 2,11) 0 16,539,579 0 542,955,006 505,461,234 Health Insurance Contributions (NOTES 2,11) 6,208,839 0 1,378,298 29,067,990 27,287,645 Non-Employer Entity Contributions (NOTE 11) 0 0 0 5,000,000 5,000,000 Court Fees 0 0 0 8,285,993 8,540,583 Members’ Service Purchase 0 311,030 0 11,865,440 11,473,763 Legacy Contributions 0 0 0 607,432 17,519 Alternate Employer Contributions 0 21,042 0 3,150,602 2,469,376 Total Contributions 6,208,839 26,174,633 1,378,298 815,882,827 761,991,368
Investment Income From Investing Income Net Appreciation(Depreciation) in Market Value of Inv. (NOTE 8) 2,942,119 9,746,583 207,314 245,334,128 1,011,544,898 Interest 64,914 215,045 4,574 5,433,229 9,712,644 Dividends 652,915 2,162,961 46,007 54,615,408 57,406,703 Other Income 1,473,091 4,880,028 103,801 123,556,254 75,773,237
From Securities Lending Activities Security Lending Activities (NOTE 9) Securities Lending Income 10,672 35,353 752 892,583 908,674 Borrower Rebates 23,662 78,388 1,667 1,979,113 1,750,778 Agents Share of Income (5,141) (17,030) (362) (429,976) (398,419) Net Securities Lending Income 29,193 96,711 2,057 2,441,720 2,261,033
Total Investment Income (Loss) 5,162,232 17,101,328 363,753 431,380,739 1,156,698,515
Less Investment Expense (1,599,032) (5,297,239) (112,675) (133,506,558) (163,432,705) Net Investment Income (Loss) 3,563,200 11,804,089 251,078 297,874,181 993,265,810
Transfers Into System 0 155,013 0 569,640 1,170,695 Total Additions 9,772,039 38,133,735 1,629,376 1,114,326,648 1,756,427,873
DEDUCTIONS Pension Benefits (NOTE 1) 0 16,956,296 0 727,203,015 686,438,726 DROP Benefits (NOTE 1) 0 2,174,688 0 108,770,862 86,736,929 Health Insurance Subsidy 3,073,707 0 318,262 18,590,895 17,566,289 Refunds To Terminated Members (NOTE 1) 0 1,631,542 0 42,459,965 45,036,355 Administrative Expenses 89,252 292,526 5,783 7,448,062 7,579,835 Transfers To Other Plans 0 19,731 0 747,113 572,748 Total Deductions 3,162,959 21,074,783 324,045 905,219,912 843,930,882 Prior-Period Adjustment 0 268,924 0 6,354,979 0
NET INCREASE (DECREASE) 6,609,080 16,790,028 1,305,331 202,751,757 912,496,991 NET POSITION HELD IN TRUST Beginning of Year, July 1 95,011,665 317,519,077 6,311,556 8,162,066,736 7,249,569,745 End of Year, June 30 101,620,745 334,309,105 7,616,887 8,364,818,493 8,162,066,736
* The accompanying notes are an integral part of these financial statements.
Comprehensive Annual Financial Report 39 FINANCIAL SECTION
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40 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
NOTE 1: PLAN DESCRIPTION PSPRS Any state, county or city in the State of Arizona may elect to have its paid, full‐time eligible employees (generally, ORGANIZATION firefighters and police officers in hazardous duty positions) The Public Safety Personnel Retirement System (PSPRS), a covered by PSPRS. At June 30, 2015 and 2014, statewide pension trust fund of the State of Arizona, is an agent mul‐ PSPRS membership consisted of: tiple employer public employee retirement plan estab‐ lished by Title 38, Chapter 5, Article 4 of the Arizona Re‐ RETIREMENT PLAN INSURANCE SUBSIDY vised Statutes, to provide benefits for public safety em‐ MEMBERSHIP TYPE 2015 2014 2015 2014 ployees of certain state and local governments. The Board of Trustees and 237 local boards jointly administer the Retirees 11,034 10,524 7,343 6,965 System. Terminated Vested 1,675 1,563 - - DROP 1,923 1,559 - - The Board of Trustees consists of seven members. Mem‐ bers are appointed by the Governor to five year terms. The Current Vested 9,781 9,492 - - Board of Trustees is responsible for the investment of the Current Non-Vested 8,628 9,034 - - Plan’s assets, setting employer contribution rates in accor‐ Total Members 33,041 32,172 7,343 6,965 dance with an actuarial study, adopting a budget, hiring personnel to administer the System, setting up records, setting up accounts for each member, paying benefits and PSPRS provides retirement benefits as well as death and the general protection and administration of the System. disability benefits. Generally, all benefits vest after five Substantial investment experience is required for the years of credited service. member of the Board that represents the state as an em‐ ployer and the two public members of the Board. A summary of benefit and plan provisions follows:
Each eligible group participating in the System has a five‐ member local board. The chief elected official of the or‐ ganization appoints three members and two members are elected by the active members of the eligible group. In general, each member serves a fixed four‐year term. Each local board is responsible for determining eligibility for membership, service credits, eligibility for benefits, the timing of benefit payments, and the amount of benefits for its eligible group of employees. The various governing bodies pay all costs associated with the administration of the local boards.
The addition or deletion of eligible groups does not require the approval of the other participating employers. The Board of Trustees approves new eligible groups for partici‐ pation. The PSPRS is reported as a component unit of the State of Arizona.
At June 30, 2015 and 2014, the number of participating local government employer groups was:
GROUP 2015 2014
Municipalities 143 143
County Agencies 21 21 State Agencies 10 10
Special Districts 63 63
Total Employers 237 237
Comprehensive Annual Financial Report 41 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
SUMMARY OF BENEFITS PSPRS NEW LAW: based on retired effective date on/after August PURPOSE 1, 2011: The new law requires that the plans have a 10.5% To provide a uniform, consistent and equitable statewide rate of return and the funding level of the System/Plans to program for public safety personnel who are regularly as‐ be at a minimum of 60% in order to award a 2% increase. signed to hazardous duty in the employ of the State of Ari‐ However, since we did not meet the 10.5% rate of return zona, or a political subdivision of this State. Membership and the funding levels for PSPRS is not currently greater consists of those eligible employees who are employed by than 60%, we are unable to grant an increase for this fiscal an employer who entered the system in 1968 or who has year, 2015/16. entered into an agreement to join the System on behalf of an eligible group. A.R.S. §38‐841 The chart below details the eligibility criteria based on your membership (hire) date. : AVERAGE MONTHLY BENEFIT Employees who became a member of the System on or Members of the plan BEFORE January 1, 2012: before December 31, 2011: An average of your highest 36 A. Retired member/survivor was receiving benefits on/before consecutive months of compensation (salary) within the July 31 of two (2) previous years. last 20 years of credited service A.R.S. § 38‐842 (7). B. Retired member/survivor was age 55 on July 1 and receiving Benefits on/before July 31 of previous year. Employees who became a member of the System on or after January 1, 2012: An average of your highest 60 con‐ Members of the plan AFTER January 1, 2012: secutive months of compensation (salary) within the last 20 years of credited service. A.R.S. § 38‐842 (7). A. Age 55 on July 1 and is receiving benefits. B. Under age 55 on July 1 and was receiving an accidental disability and Compensation includes base wages, shift and military dif‐ was receiving benefits on/before July 31 of two (2) previous years. ferential wage pay, compensatory time used by an em‐ C. Survivor under 55 on July 1, is survivor of KIA and receiving benefits ployee in lieu of overtime not otherwise paid by an em‐ on/before July 31 of two (2) previous years. ployer, holiday and overtime pay that is paid to an em‐ ployee by the employer for the employee’s performance of services in an eligible group on a regular monthly, semi‐ From and after December 31, 2015, legislature may enact monthly, or biweekly payroll basis as well as any longevity permanent one‐time benefit increases after an analysis of pay paid to an employee at least every six months for the effect of the increase on the System by the Joint Legis‐ which contributions are made to the system. For the pur‐ lative Budget Committee (JLBC). A.R.S. § 38‐856.03. poses of computing retirement benefits, compensation does not include unused sick leave, unused compensatory The reserve balance as of June 30, 2015 is $0.00. time, payment in lieu of vacation, “fringe” benefit pay (such as uniform allowance, cell phone or mileage reimburse‐ CANCER INSURANCE ment) and any payments made directly or indirectly by the A cancer insurance program is administered by the PSPRS employer to the employee for work performed for a third for eligible fire fighters and peace officers. A.R.S. §§ 38‐641 party on a contracted basis except for third party contracts through 38‐645. in certain situations. A.R.S. § 38‐842(12). CONTRIBUTIONS BENEFIT INCREASE (PBI) From July 1, 2014 through June 30, 2015, each member Statutes determine the Permanent Benefit Increase (PBI) shall contribute 11.65% of compensation to the System on eligibility for the retiree’s/survivor’s and how it is calcu‐ a pre‐tax basis by payroll deduction. The contribution rate lated pursuant to A.R.S. §§ 38‐856 and 38‐856.02 How‐ for members will change each fiscal year. A.R.S. §38‐843 ever, the Fields Lawsuit determines who is eligible for the (E). increase using OLD OR NEW LAW based on the effective retirement date as stated below: A member may not, under any circumstance, borrow from, take a loan against or remove contributions from the mem‐ OLD LAW: based on retired effective date on/before July 1, ber’s account before the termination of membership in the 2011: The old law requires that the System/Plans have a plan or the receipt of a pension. A.R.S. § 38‐843(C). 9% rate of return and that one‐half of the excess earnings over 9% go into a reserve account. However, since we did A County employer that elected to pay a higher level per‐ not meet the 9% rate of return and the PSPRS reserve ac‐ centage contribution rate may eliminate that higher level count had been depleted in fiscal year 2014/15, we are percentage contribution rate amount for members who are unable to grant an increase for this fiscal year, 2015/16. hired on or after January 1, 2015. A.R.S. § 38‐843 (B).
42 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
CREDITED SERVICE time student. An eligible Child’s Pension shall become pay‐ Credited service is defined as service for which contribu‐ able directly to the eligible child when the eligible child tions are paid into the system on behalf of the employee. reaches the age of 18, if the child remains eligible to re‐ Any leaves without pay, either voluntary or involuntary, ceive the pension and is not subject to a guardianship or are not credited service. Therefore, if a member was on a conservatorship due to disability or incapacity. A.R.S. §§ leave and not receiving salary during this period of time, 38‐842(23) and 38‐846, OR the member would accrue service, but not credited service. A.R.S. § 38‐842(13). Guardian Benefit. If there is no surviving spouse, or the pension of the surviving spouse is terminated, and there is DEATH BENEFITS ‐ ACTIVE MEMBER at least one (1) eligible child, a Guardian Benefit of 80% Pursuant to statutes, an AUTOMATIC survivor benefit will (based on the calculation for a Spouse’s Pension) and the pay your eligible spouse* and eligible child(ren)**. If there applicable Child’s Pension (based on the calculation for a is no eligible spouse or eligible child(ren), the balance of Child’s Pension) will be paid to the guardian of the the applicable contributions, if any, will be paid to the (unmarried) eligible child(ren) until the child turns 18, or named beneficiary(ies) on file. If there is no beneficiary, under 23 years of age only during any period that the your Local Board will determine the next‐of‐kin, or estate. (unmarried) child is a full‐time student. If a Guardian A.R.S. 38‐846(I). Benefit is paid to a disabled child (the child’s disability oc‐ curred prior to the age of 23) and remains a dependent of * Proof of recorded/filed marriage license/certificate with the guardian, the benefit is payable to the guardian or con‐ the Clerk of the Court or County Clerk will be required. servator for the lifetime of the child. A.R.S. § 38‐842(23) Failure to provide it may affect the continuation of health and 38‐846. If the member was killed in the line of duty, insurance and surviving spouse benefits. If you are receiv‐ the Guardian Benefit is 100% of the member’s average ing a monthly benefit, statute requires two (2) consecutive monthly benefit compensation (less the Child’s Pension if years of marriage. applicable), OR
** Definition of an “eligible child” is unmarried, under the Balance of Contributions. If there is no surviving spouse or age of 18, and/or attending full‐time school between the eligible child(ren), the member's named beneficiary on file ages of 18 to 23, plus disabled child(ren) if disability oc‐ will receive the member’s accumulated contributions. If curred before the age of 23 and who is(are) a dependent of the surviving beneficiary does not apply for the benefit the member. within twelve months from the date of the member’s death, the Local Board has the authority to pay the mem‐ Note: Divorce automatically terminates the ex‐spouse as ber’s nearest of kin, or estate. A.R.S. § 38‐846(I). the member’s beneficiary. To maintain an ex spouse as a beneficiary, you must complete a Beneficiary Designation DEATH BENEFITS ‐ INACTIVE MEMBER Form and/or a DROP Beneficiary Designation Form, as ap‐ Balance of Contributions. If the member was inactive, the plicable, after the date of the divorce. member's named beneficiary on file will receive the mem‐ ber’s accumulated contributions. If the surviving benefici‐ Depending if you are working, inactive, retired, or DROP, ary does not apply for the benefit within twelve months read below for additional beneficiary details. from the date of the member’s death, the Local Board has the authority to pay the member’s nearest of kin, or estate. Spouse’s Pension. The surviving spouse of an active mem‐ A.R.S. §§ 38‐842(30) and 38‐846(I). ber will receive a Spouse’s Pension each month for life‐ time. The Spouse’s Pension is 80% of the pension based on DEATH BENEFITS ‐ RETIRED/DROP MEMBER the calculation for an accidental disability retirement. If Spouse’s Pension. If married for at least two (2) consecu‐ the member was killed in the line of duty, the spouse will tive years at the time of the member’s death, the surviving receive a lifetime monthly benefit of 100% of the mem‐ spouse will receive a Spouse’s Pension each month for life‐ ber’s average monthly benefit compensation less the time based on 80% of the member's pension benefit. A.R.S. “Child’s Pension” stated below (if applicable). A.R.S. § 38‐ § 38‐846, AND 846, AND Child’s Pension. The surviving eligible child(ren) will re‐ Child’s Pension. The surviving eligible child(ren) will re‐ ceive a Child’s Pension up to 20% (in equal shares, but no ceive a Child’s Pension up to 20% (in equal shares, but no more than 10% per eligible child) each month based on the more than 10% per eligible child) each month based on the member’s pension until each (unmarried) child turns 18, calculation for an accidental disability retirement until or under 23 years of age only during any period that the each (unmarried) child turns 18, or under 23 years of age (unmarried) child is a full‐time student. only during any period that the (unmarried) child is a full‐
Comprehensive Annual Financial Report 43 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
An eligible Child’s Pension shall become payable directly to of credited service under 25 years, or the normal pension the eligible child when the eligible child reaches the age of amount, whichever is greater (but not less than 50% of the 18, if the person remains eligible to receive the pension average monthly compensation). (There is no age or cred‐ and is not subject to a guardianship or conservatorship ited service requirement.) The Local Board may require due to disability or incapacity. A.R.S. §§ 38‐842(23) and 38 periodic medical re‐evaluations and the accidental disabil‐ ‐846, OR ity may terminate if the Local Board finds the member no longer meets the requirements for the disability benefit Guardian Benefit. If there is no surviving spouse, or the and refuses an offer of employment by an employer in the pension of the surviving spouse is terminated, and there is system. A.R.S. §§ 38‐844 and 38‐845. at least one eligible child, a Guardian Benefit of 80% (based on the member’s pension) and the applicable CATASTROPHIC DISABILITY Child’s Pension (based on the member’s pension) will be A physical (not mental) condition or injury that totally and paid to the guardian of the (unmarried) eligible child(ren) permanently prevents an employee from engaging in any until the child turns 18, or under 23 years of age only dur‐ gainful employment that was incurred in the performance ing any period that the (unmarried) child is a full‐time stu‐ of the employee's duties and that did not exist or occur dent. If a Guardian Benefit is paid to a disabled child (the before the employee’s date of membership in the System. A child’s disability occurred prior to the age of 23) and re‐ member shall file an application for a disability pension mains a dependent of the guardian, the benefit is payable after the disabling incident or within one year after the for the lifetime of the child. A.R.S. § 38‐842(23) and 38‐ date the member ceases to be an employee by reason of 846, OR disability. A.R.S. §§ 38‐842(9) and 38‐844.
Balance of Contributions. If there is no surviving spouse or Eligibility for a catastrophic disability will be determined eligible child(ren), the member's named beneficiary on file by the Local Board upon an independent medical examina‐ will receive the balance of the member's accumulated con‐ tion. The monthly benefit is 90% of average monthly bene‐ tributions less the pension payments made to the member. fit compensation for first 60 months then reduced to either If the surviving beneficiary does not apply for the benefit 62.5% of the average monthly benefit compensation, or within twelve months from the date of the member’s normal pension amount, whichever is greater. (There is no death, the Local Board has the authority to pay the mem‐ credited service requirement.) The Local Board may re‐ ber’s nearest of kin, or estate. A.R.S. § 38‐846(I). quire periodic medical re‐evaluations and the catastrophic disability may terminate if the Local Board finds the mem‐ DROP LUMP SUM PAYMENT ber no longer meets the requirements for the disability DROP Beneficiary. As per the DROP Beneficiary Designation benefit. A.R.S. §§ 38‐844 and 38‐845 and Section 11. form on file, the member’s named beneficiary will be paid the accrued DROP monies. A.R.S. § 38‐844.07. ORDINARY DISABILITY A physical condition that totally and permanently prevents ACCIDENTAL DISABILITY an employee from performing a reasonable range of duties A physical or mental condition which totally and perma‐ within the employee’s department, or a mental condition nently prevents an employee from performing a reason‐ that totally and permanently prevents the employee from able range of duties within the employee's job classifica‐ engaging in any substantial gainful activity. The physical tion that was incurred in the performance of the em‐ or mental condition or injury did not occur before the em‐ ployee's duties and was not the result of a physical or men‐ ployee’s date of membership in the System. A member tal condition or injury that existed or occurred before the shall file an application for a disability pension after the employee’s date of membership in the System. A member disabling incident or within one year after the date the shall file an application for a disability pension after the member ceases to be an employee by reason of disability. disabling incident or within one year after the date the A.R.S. §§ 38‐842(34) and 38‐844. member ceases to be an employee. A.R.S. §§ 38‐842(1) and 38‐844. Eligibility for an ordinary disability will be determined by the Local Board upon an independent medical examina‐ Eligibility for an accidental disability will be determined by tion. For all members, the monthly benefit is a percentage the Local Board upon an independent medical examina‐ of normal retirement based on the employee’s years of tion. For members with a membership date on or before credited service (maximum of 20 years) divided by twenty December 31, 2011, the monthly benefit is 50% of the (20). The Local Board may require periodic medical re‐ member's average monthly compensation, or the normal evaluations and the ordinary disability may terminate if pension amount, whichever is greater. For members with the Local Board finds that the member no longer meets the a membership date on or after January 1, 2012, the requirements for the disability benefit and refuses an offer monthly benefit is 62.5% of the member's average of employment by an employer in the system. A.R.S. §§ 38‐ monthly compensation less a 4% reduction for each year 844 and 38‐845.
44 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
TEMPORARY DISABILITY the DROP program with the employer for a period of up to A physical or mental condition that totally and temporarily 60 months (5 years). The member’s monthly benefit is prevents an employee from performing a reasonable range calculated based upon the years of credited service and of duties within the employee's department and that was average monthly compensation at the beginning of the incurred in the performance of the employee's duties. The DROP period and that same amount is credited to the monthly benefit is one‐twelfth of 50% of annual compen‐ DROP account with interest (subject to change each fiscal sation at time of disability. (There is no credited service year equal to the average annual return of the system – requirement.) The disability pension will be paid for no minimum 2%; maximum assumed earnings rate). The in‐ more than twelve (12) months, or if the member returns to terest rate for the DROP account is 3.40% from July 1, work, or if the Local Board deems the member is no longer 2014 through June 30, 2015. A.R.S. §§ 38‐842, 38‐844.02 under temporary disability, whichever occurs first. The through 38‐844.09, and 38‐844.06(B). member must terminate employment by reason of disabil‐ ity in order to receive this benefit. A.R.S. §§ 38‐842(47), 38 Additionally, during the DROP period, the member remains ‐844 and 38‐845. as a full‐time employee and contributions will be paid by the employee ONLY (no contributions will be paid by the DIVORCE / DOMESTIC RELATIONS ORDER (DRO) employer) at the same contribution rate previously being If the member has been involved in a divorce(s), please paid, but employee will not earn any additional credited provide the PSPRS with a complete copy of the Divorce service. At the end of the sixty (60) months (or prior to Decree(s) and any attachments or exhibits if referenced in that time), the member terminates employment and the the Decree(s). Upon receipt, additional correspondence monies accrued in DROP will be paid as a lump‐sum either will be provided to the parties. If the retirement account is directly to the member (less mandated taxes), or as a roll‐ required to be split, a Domestic Relations Order (DRO) will over. The member will then begin receiving the monthly need to be prepared. To ensure that the language in the retirement benefit ‐ which is the same amount that was DRO is acceptable, it is recommended to provide the PSPRS calculated at the beginning of DROP and will also receive with a draft copy of the DRO for review and approval prior the contributions made to the retirement system during to submitting it to the court. A.R.S. § 38‐860. period of time in DROP, plus interest (subject to change each fiscal year). The interest rate for the contributions DEFERRED RETIREMENT OPTION PLAN (DROP) made during the member’s participation in DROP is 2.0%. *Employees who became a member on or before December A.R.S. §§ 38‐842, 38‐844.02 through 38‐844.09, and 38‐ 31, 2011 that have AT LEAST 20 years of credited service on 844.06(B). January 1, 2012 and enter into DROP either prior to or after January 1, 2012 may voluntarily and irrevocably enter into *Employees who became a member on or after January 1, the DROP program with the employer for a period of up to 2012 are not eligible to participate in DROP. sixty (60) months (i.e., 5 years). The member’s monthly benefit is calculated based upon the years of credited ser‐ As of June 30, 2015 the DROP balance is $1,650,763,466. vice and average monthly compensation at the beginning The liability for DROP for FY2015 is $1,650,763,466. of the DROP period and that same amount is credited to the DROP account with interest (subject to change each ELIGIBILITY fiscal year). Currently, the interest rate is 7.5% from July Police officers who are certified peace officers and fire 1, 2014 through June 30, 2015. fighters are eligible to participate in the PSPRS if the em‐ ployee’s customary employment is for at least forty (40) Additionally, during the DROP period, the member remains hours per week for more than six (6) months in a calendar as a full‐time employee and contributions will not be paid year and are regularly assigned to hazardous duties. Retro‐ by the employee or the employer and the employee will active to January 1, 2009, police and fire chiefs are eligible not earn any additional credited service. At the end of the to participate in the PSPRS. A.R.S. § 38‐842 (24 and 31). sixty (60) months (or prior to that time), the member ter‐ minates employment and the monies accrued in DROP will GARNISHMENTS be paid as a lump‐sum either directly to the member (less As permitted by statute and upon receipt of acceptable mandated taxes), or as a rollover. The member will then legal documentation directing our office, if the member is begin receiving the monthly retirement benefit ‐ which is retired, we may withhold from a members retirement (or the same amount that was calculated at the beginning of disability) benefit for child support payments, Domestic DROP. A.R.S. §§ 38‐842, 38‐844.02 through 38‐844.09. Relation Orders and/or Levy from the Internal Revenue Service (IRS). However, if we receive any other garnish‐ *Employees who became a member on or before December ment or judgment, or receive any garnishment or judg‐ 31, 2011 that have LESS THAN 20 years of credited service ment for a member that is currently working, we will take on January 1, 2012 and enter into the DROP program after it under advisement with the Arizona Attorney General’s January 1, 2012, may voluntarily and irrevocably enter into Office. A.R.S. § 38‐850.
Comprehensive Annual Financial Report 45 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
If you are retired (or receiving a disability retirement) and members or survivors PSPRS employer. However, as your child support payments are expected to stop, the stated in the beginning of this section, retirees and eligible clearinghouse or court will be required to provide our of‐ survivors that elect retiree group health insurance may be fice with a stop order (i.e., Order Stopping Order of Assign‐ eligible for the Premium Benefit. A.R.S. § 38‐857 ment or Termination of Income Withholding Order, etc). Additionally, if your Levy is expected to stop, it is re‐ If a law enforcement officer, as defined in A.R.S. §38‐1114, quired that we receive a Release of Levy from the IRS. is killed in the line of duty, the eligible surviving spouse or dependent(s) are entitled to insurance benefits either by Please note that child support and levy payments are tax‐ the former employer, or from the state retirement system able income to you. Therefore, if you would like to make from which the spouse or dependent is receiving benefits. any changes to your Federal and/or State withholding, you The health insurance premium amount payable by the em‐ may access the withholding forms from the PSPRS website ployer of the deceased law enforcement officer is the at http://www.psprs.com/. Benefit payments issued to an amount the employer of the deceased law enforcement ex‐spouse become taxable income to the ex‐spouse; how‐ officer would pay for an active law enforcement officer for ever, for additional information pursuant to the Domestic a family coverage premium or single coverage premium, Relations Order, please refer to the “Divorce and Domestic whichever is applicable. For additional eligibility require‐ Relations Order (DRO) FAQ.” ments, refer to A.R.S. § 38‐1114.
Our cut‐off to process any changes to your account is the As of July 2013, pursuant to §§ 38‐857 the board estab‐ 10th of the month. If the orders are received by the clear‐ lished a separate account for the health insurance and inghouse, court or IRS by the 10th of the month, the change these funds cannot be used for any other benefits. will occur with the payment paid at the end of that month. If received after the 10th of the month, the change JOINDERS will occur with the payment at the end of the following Specific positions and employers may participate in the month. PSPRS if the governing body of the employer enters into a joinder agreement to bring such employees into the PSPRS. HEALTH INSURANCE The joinder agreement shall be in accordance with the pro‐ Pursuant to A.R.S. §§ 38‐857, 38‐651.01 and 38‐782, retir‐ visions of this System. Assets under any existing public ees and eligible survivors under the System that elect employee defined benefit retirement program shall be group health insurance and/or accident insurance cover‐ transferred to the PSPRS within sixty (60) days after the age through the Arizona State Retirement System group employer’s effective date. A.R.S. § 38‐851. plan (ASRS), the Arizona Department of Administration (ADOA) group plan, or a group plan through an employer LOCAL BOARD of the PSPRS or CORP plans, the System may pay up to the Each employer that participates in the PSPRS is required to following amount Premium Benefit amount: be vested in a 5‐person board that determines PSPRS eligi‐ bility and benefits pursuant to statutes. (If a member SINGLE FAMILY needs contact information for the Local Board Secretary or Not All Not All One representative, the PSPRS can assist with providing the Medicare Medicare Medicare Medicare With contact information.) A.R.S. § 38‐847. Eligible Eligible Eligible Eligible Medicare $150.00 $100.00 $260.00 $170.00 $215.00 PURCHASE OF HANDGUN OR SHOTGUN Upon retirement and subject to approval by the employer, the PSPRS retiree may purchase the handgun or shotgun Retirees with a membership (hire) date on/before Septem‐ issued by the employer to the employee at less than fair ber 11, 2013 that meet the “Returning to Work after Re‐ market value. A.R.S. § 38‐845(H). tirement” qualifications and that are re‐employed by a par‐ ticipating PSPRS employer, may be eligible to have their REFUNDS active medical/dental insurance subsidized (retroactive to Employees who became a member on or before December September 2013) up to the amount of the premium, but no 31, 2011, pursuant to A.R.S. § 38‐846.02 (A and B), upon more than the amount as allowed by statute. A.R.S. § 38‐ termination of employment (for any reason other than 857. death or retirement) within twenty (20) days after filing an application with the PSPRS, the member will receive a New employees with a membership (hire) date on/after lump‐sum payment of accumulated contributions (less any September 12, 2013 (or their eligible survivors), will not benefits paid or any amounts owed to the System) ‐ thus, be eligible for the Premium Benefit when they retire and if forfeiting all membership rights and credited service in the they become re‐employed with a PSPRS employer and par‐ System upon receipt of refund of contributions. ticipate in active health care coverage provided by the
46 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
If the member has five (5) or more years of credited ser‐ 20 to 24.99 years of credited service: 50% of the aver‐ vice, an additional percentage of contributions will be re‐ age monthly benefit compensation for the first 20 funded to the member according to the member’s years of years of credited service plus 2% of the average service as stated below: monthly benefit compensation for each year of cred‐ 5 to 5.9 years of service = 25% of additional member ited service between 20 and 24.99. A.R.S. §§ 38‐842(7) contributions. and 38‐845(A)(2). 6 to 6.9 years of service = 40% of additional member contributions. 25 or more years of credited service: 50% of the average 7 to 7.9 years of service = 55% of additional member monthly benefit compensation for the first 20 years of contributions. credited service plus 2.5% of the average monthly 8 to 8.9 years of service = 70% of additional member benefit compensation for each year of credited service contributions. above 20 years ‐ up to a maximum of 80% of the aver‐ 9 to 9.9 years of service = 85% of additional member age monthly benefit compensation. A.R.S. §§ 38‐842(7) contributions. and 38‐845(A)(2). 10 or more years of service = 100% of member contri‐ butions plus 3% interest if left on deposit after 30 days. DEFERRED ANNUITY: Inactive members (not making con‐ tributions to the System) that have at least (ten) 10 years Employees who became a member on or after January 1, of credited service may elect to receive a Deferred Annuity 2012, pursuant to A.R.S. § 38‐846.02 (C), upon termination at the age of sixty‐two (62). This annuity is a lifetime of employment (for any reason other than death or retire‐ monthly payment that is actuarially equivalent to the ment) within twenty (20) days after filing an application member’s accumulated contributions in the System plus an with PSPRS, shall receive a lump‐sum payment, plus inter‐ equal amount paid by the employer. This annuity is not a est at a rate determined by the board (currently 3%) as of retirement benefit and annuitants are not entitled to survi‐ the date of termination, of ONLY their accumulated contri‐ vor benefits, benefit increases, or the group health insur‐ butions (less any benefits paid or any amounts owed to ance subsidy. A.R.S. § 38‐846.01(A). the System) ‐ thus, forfeiting all membership rights and credited service in the System upon receipt of refund of Note for “inactive” members: For important death‐benefit contributions. The member will NOT receive the addi‐ information, please refer to the Death Benefit section un‐ tional percentage of contributions as stated above. der “Inactive Member.”
A member may not, under any circumstance, borrow from, Employees who became a member on or after January 1, take a loan against or remove contributions from the mem‐ 2012. RETIREMENT: Pursuant to A.R.S. §§ 38‐842(7, 12, ber’s account before the termination of membership in the 32 and 44) and 38‐844 and 38‐845, retirement benefits plan or the receipt of a pension. A.R.S. § 38‐843(C). will commence the first day of month following termina‐ tion of employment and based upon the following: RETIREMENT AND DEFERRED ANNUITY Age 52.5 with 25 years of service: 62.5% of the average Employees who became a member on or before December monthly benefit compensation. Benefits will be re‐ 31, 2011. RETIREMENT: Pursuant to A.R.S. §§ 38‐842(7, duced by 4% for each year of credited service under 12, 13, 32 and 44) and 38‐844 and 38‐845, retirement 25 years. A.R.S. §§ 38‐842(7 and 32) and 38‐845(G). benefits will commence the first day of month following 25 or more years of service: 62.5% of the average termination of employment and based upon the following: monthly benefit compensation for the first 25 years of credited service plus 2.5% of the average monthly Age 62 with 15 years of service: 50% of the average benefit compensation for each year over 25 years of monthly benefit compensation for the first 20 years of credited service ‐ up to a maximum of 80% of the aver‐ credited service. The pension is reduced by 4% per age monthly benefit compensation. The pension is year for each year of credited service under 20 years. reduced by 4% per year for each year of credited ser‐ A.R.S. §§ 38‐842(7 and 32) and 38‐845(A)(1). vice under 25 years with a pro‐rata reduction for any
20 years of credited service: 50% of the average fractional years. A.R.S. §§ 38‐842(7) and 38‐845(G). monthly benefit compensation for the first 20 years of credited service. A.R.S. §§ 38‐842(7) and 38‐845(A). A member who attains the service requirement for a nor‐ mal retirement, but does not meet the age requirement, 20 years of service with less than 20 years of credited may elect to leave contributions on account until reaching service: 50% of the average monthly benefit compen‐ the age requirement and then elect to receive a retirement sation for the first 20 years of credited service. The benefit – which would allow them to qualify for survivor pension is reduced by 4% per year for each year of benefits, benefit increases, and/or the group health insur‐ credited service under 20 years. A.R.S. §§ 38‐842(7 ance subsidy. A.R.S. § 38‐846.01(B). and 32) and 38‐845(A)(1).
Comprehensive Annual Financial Report 47 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
DEFERRED ANNUITY: Employees who became a member If you return to work with any employer, the Local Board on or after January 1, 2012 are not eligible for a Deferred must review and make the determination of my return to “Annuity.” However, see preceding paragraph. A.R.S. § 38‐ work eligibility and will also need to detail their decision in 846.01 (B). the Local Board meeting minutes as well as the Local Board will be required to provide the PSPRS with the nec‐ RETURN TO WORK AFTER RETIREMENT essary documentation to review my return to work eligi‐ You may return to work with the employer from which you bility; otherwise, my retirement benefits may be sus‐ retired and continue to receive your retirement benefits as pended pending PSPRS review. long as you are retired for one (1) year from the effective date of your retirement. However, at ANY time following If a retired member returns to work in any capacity in a retirement, if you are re‐employed in the same, or substan‐ position ordinarily filled by an employee, the employer is tially similar position by the employer from which you re‐ required to pay an alternate contribution rate to the tired, your retirement benefits will be suspended. PSPRS. From July 1, 2014 through June 30, 2015, the alter‐ nate contribution rate is 28.62%. Effective August 2, 2012, If you are hired in any capacity by the employer from this section does not apply if the retired member is re‐ which you retired before the year break, your retirement quired to participate in another state retirement system benefits will be suspended. and the retired member returned to work before July 20, 2011. A.R.S. § 38‐843.05. You can return to work with the employer from which you retired and continue to receive your retirement benefits as SERVICE PURCHASE long as you are retired for a minimum of sixty (60) con‐ Purchase of Prior Active Military Service. Members who secutive days from the effective date of your retirement have at least ten (10) years of service with the System may and you were hired as a result of participating in an open, purchase up to sixty (60) months of credited service for competitive, new‐hire process for an entry‐level, nonsu‐ periods of active military service performed before em‐ pervisory position, or hired as a fire inspector, or arson ployment with their current employer. A.R.S. § 38‐858(A). investigator. Active members may also receive credited service limited to sixty (60) months if ordered/volunteered to active mili‐ You may continue to receive your retirement benefits if tary service while working for the current employer if the you are assigned to voluntary duties (i.e., acting as a lim‐ criteria is met pursuant to A.R.S. § 38‐858. The member ited authority peace officer for an employer pursuant to shall pay the members contributions, upon which the em‐ the Arizona peace officer standards and training board ployer shall make employer contributions. If member per‐ rules). forms military service due to presidential call‐up, the em‐ ployer shall make the employer and employee contribu‐ If you are receiving an accidental or ordinary disability tions not to exceed forty‐eight (48) months pursuant to retirement (and have not reached normal retirement) and A.R.S. § 38‐858 (G). For more information, contact your have become employed by any employer in a PSPRS cov‐ employer. ered position, your local board shall determine if you will continue to receive your retirement benefits. Upon eligi‐ Purchase of Prior Service from an Out‐of‐State Agency. Ac‐ bility for (re)retirement, the service from the disability tive members who have at least five (5) years of service retirement will be considered “service” and not “credited” with the System that have previous service with an agency service and your average monthly compensation will be of the U.S. Government, a state of the U.S., or a political sub‐ based on the compensation from the new employment. division of a state of the U.S. as a full‐time paid fire fighter or full‐time paid certified peace officer may elect to re‐ You cannot have an implicit or explicit pre‐existing agree‐ deem up to sixty (60) months of any part of the prior ser‐ ment with the employer from which you retired, whether vice if the prior service is not on account with any other written or verbal, to return to work, in any capacity. retirement system. A.R.S. § 38‐853.01.
If you return to work with the employer from which you Purchase of Prior Forfeited Service within the SAME Retire‐ retired, within ten (10) days of reemployment, the Local ment Plan. If a former member who becomes RE‐ Board is required to notify our office of your reemploy‐ EMPLOYED with the SAME EMPLOYER within two years ment. Additionally, the Local Board must make the deter‐ after the former member's termination date, and applies mination of my return to work eligibility and will also need with the System within ninety days of reemployment, may to detail their decision in the Local Board meeting minutes elect to purchase all of the previously forfeited credited as well as the Local Board will be required to provide the service. PSPRS with the necessary documentation to review my return to work eligibility; otherwise, my retirement bene‐ fits may be suspended pending PSPRS review.
48 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (PSPRS)
The amount required to reinstate the credited service is state retirement System/Plans that have credited service the amount previously withdrawn plus interest at the rate under another Arizona state retirement System/Plan may of 9% compounded annually from the date of withdrawal transfer the credited service to their current Arizona state to the date of repayment and the reimbursement is re‐ retirement System/Plan by transferring the full actuarial quired to be paid within one (1) year from the date of re‐ present value of the credited service into the current Ari‐ employment. A.R.S. § 38‐849(C). (Form P1B) OR zona retirement System/Plan with the approval of the If the statutory requirements above are not met, the mem‐ PSPRS or governing board. A reduced credited service ber may still purchase some or all of the previously for‐ amount may be transferred based on the transfer of the feited credited service calculated based on an amount com‐ actuarial present value of the credited service under the puted by the System’s actuary to equal the actuarial pre‐ prior Arizona state System/Plan. A.R.S. §§ 38‐921 and 38‐ sent value. A.R.S. § 38‐849(C)(D), as applicable. (Form P2) 922.
Purchase of Service between the Arizona Retirement Plans/ Transfer of Service between Municipal Retirement Systems Systems. Members of any of the four Arizona state retire‐ and Special Retirement Plans. (Form U2A). An active or ment System/Plans that have credited service under an‐ inactive member of a retirement System or Plan of a mu‐ other Arizona state retirement System/Plan may redeem nicipality of this state (i.e., City of Phoenix and City of Tuc‐ the credited service to their current Arizona state retire‐ son) or of the PSPRS may transfer the service to their cur‐ ment System/Plan by paying the full actuarial present rent retirement System or Plan based on the member’s value of the credited service into the current Arizona re‐ accumulated contributions plus interest, or the member tirement System/Plan with the approval of the PSPRS or may elect a reduced service amount to be transferred governing board. A.R.S. § 38‐922. based on the actuarial present value. A.R.S. §§ 38‐923 and 38‐924. Purchase of Service from Rural Metro/Contract Service. Active members that have previous service with a corpora‐ This is not an official version of the Arizona Revised Stat‐ tion that contracted with an employer now covered by the utes. If there are any differences or discrepancies, the offi‐ System to provide firefighting services on behalf of that cial version will prevail. employer as a full‐time paid firefighter may purchase ser‐ vice subject to limitations pursuant to federal laws. A.R.S. §§ 38‐842 and 38‐853.01. NOTE 2: CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE PSPRS Purchase of Service with a PSPRS Employer Prior to Joinder Date. Active members of the System that had previous The Retirement System's funding policy provides for peri‐ service in this state as an employee with an employer now odic employer contributions at actuarially determined covered by the System as a full‐time paid fire fighter or full rates that, expressed as percentages of annual covered ‐time paid certified peace officer may elect to redeem any payroll, are designed to accumulate sufficient assets to part of the prior service if the prior service is not on ac‐ pay benefits when due. The normal cost and actuarial ac‐ count with any other retirement system. A.R.S. § 38‐ crued liability are determined using the Entry Age Normal 853.01. cost method. Unfunded actuarial accrued liabilities and assets in excess of actuarial accrued liabilities are being TAXATION OF RETIREMENT BENEFITS amortized as a level percent of payroll over a closed 21 All PSPRS retirement benefits in excess of $2,500 annually year period. Beginning July 1, 2006, the minimum em‐ will be subject to Arizona state tax. A.R.S. §§ 38‐852 and 43 ployer contribution rate increased from 5% to 8%. A.R.S. ‐1022. §38‐843.
TRANSFERS During the year ended June 30, 2015, contributions were Transfer of Contributions between PSPRS Employers. (Form made in accordance with contribution requirements de‐ P1A). A member who terminates employment with an em‐ termined by an actuarial valuation of the System as of ployer and accepts a position with the same or another June 30, 2013. Employer contributions represented employer participating in the system, after completing an 31.03% of covered payroll [12.89% for normal costs application that is acceptable to the board shall have their (12.55% pension and 0.34% health insurance) and credited service transferred to their record with the new 19.65% for amortization of unfunded actuarial accrued employer if they leave their accumulated contributions on liability in aggregate (18.48% pension and 1.17% health deposit with the System. The period not employed shall insurance subsidy)]. Member contributions represented not be considered as service. A.R.S. § 38‐853. 11.05% of covered payroll and are attributable to normal costs. Transfer of Service between the Arizona Retirement Plans/ Systems. (Form U2). Members of any of the four Arizona
Comprehensive Annual Financial Report 49 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
NOTE 1: PLAN DESCRIPTION EORP All state and county elected officials and judges are mem‐ bers of the Plan. Any city or town in the state of Arizona ORGANIZATION may elect to have its’ elected officials covered by EORP. At The Elected Officials’ Retirement Plan (EORP), a pension June 30, 2015 and 2014, statewide EORP membership con‐ trust fund of the State of Arizona, is a cost sharing multiple sisted of: ‐employer public employee retirement plan established by Title 38, Chapter 5, Article 3 of the Arizona Revised Stat‐ RETIREMENT PLAN INSURANCE SUBSIDY utes, to provide benefits for elected officials and judges of certain state, county and local governments. The Board of MEMBERSHIP TYPE 2015 2014 2015 2014 Trustees of the Public Safety Personnel Retirement System Retirees 1,116 1,053 649 597 (PSPRS) administers the EORP Plan. Terminated Vested 171 149 - -
The Board of Trustees consists of seven members. Mem‐ Current Vested 500 549 - - bers are appointed by the Governor to five year terms. Current Non-Vested 238 294 - - Board of Trustees is responsible for the investment of the Total Members 2,025 2,045 649 597 Plan’s assets, setting employer contribution rates in accor‐ dance with an actuarial study, adopting a budget, hiring personnel to administer the Plan, setting up records, set‐ EORP provides retirement benefits as well as death and ting up accounts for each member, paying benefits and the disability benefits. Generally, all benefits vest after five general protection and administration of the System. Sub‐ years of credited service. stantial investment experience is required for the member of the Board that represents the state as an employer and A summary of benefit and plan provisions follows: the two public members of the Board.
The addition or deletion of eligible groups does not require the approval of the other participating employers. The Board of Trustees approves new eligible groups for partici‐ pation. The EORP is reported as a component unit of the State of Arizona. The State of Arizona is considered a non‐ employer contributing member.
In 2013 the legislature passed HB 2608 effectively closing the Elected Official’s Retirement Plan (EORP). See Note 4 for additional information on the closure.
At June 30, 2015 and 2014, the number of participating local government employer groups was:
GROUP 2015 2014 Cities and Towns 22 21 Counties 15 15
State Agencies 2 2 Non-Empolyer Entity 1 1 Total Employers 40 39
50 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
SUMMARY OF BENEFITS than 60%, we are unable to grant an increase for this fiscal year, 2015/16. PURPOSE To provide a uniform, consistent, and equitable statewide The chart below details the eligibility criteria based on program for those eligible elected officials as defined by your membership (hire) date. : the Plan. A.R.S. §38‐810.02.B Members of the plan BEFORE January 1, 2012: AVERAGE MONTHLY BENEFIT A. Retired member/survivor was receiving benefits on/before Employees who became a member of the Plan on or before July 31 of two (2) previous years. December 31, 2011: An average of your highest thirty‐six B. Retired member/survivor was age 55 on July 1 and receiving (36) consecutive months within the last ten (10) years of Benefits on/before July 31 of previous year. completed years of credited service as an elected official that yield the highest average. If an employee does not have three (3) consecutive years of credited service as an Members of the plan AFTER January 1, 2012: elected official, the considered period is the employee's A. Age 55 on July 1 and is receiving benefits. last consecutive period of employment with a Plan em‐ B. Under age 55 on July 1 and was receiving an accidental disability and ployer immediately before retirement. A.R.S. § 38‐801(5). was receiving benefits on/before July 31 of two (2) previous years. C. Survivor under 55 on July 1, is survivor of KIA and receiving benefits Employees that became a member of the Plan on or after on/before July 31 of two (2) previous years. January 1, 2012: An average of your highest sixty (60) con‐ secutive months within the last ten (10) years of com‐ pleted years of credited service as an elected official that The increase will be calculated based on (if there are insuf‐ yield the highest average. If an employee does not have ficient earnings to cover the maximum increases, the per‐ five (5) consecutive years of credited service as an elected centage increase is limited to the earnings available): official, the considered period is the employee's last con‐ If the ratio of the actuarial value of assets to liabilities is secutive period of employment with a Plan employer im‐ 60‐64% and the total return is more than 10.5% for the mediately before retirement. A.R.S. § 38‐801(5). prior fiscal year, 2% maximum increase to all eligible retirees and survivors. PERMANENT BENEFIT INCREASE (PBI) If the ratio of the actuarial value of assets to liabilities is Statutes determine the Permanent Benefit Increase (PBI) 65‐69% and the total return is more than 10.5% for the eligibility for the retiree’s/survivor’s and how it is calcu‐ prior fiscal year, 2.5% maximum increase to all eligible lated pursuant to A.R.S. §§ 38‐818 and 38‐818.01 How‐ retirees and survivors. ever, the Fields Lawsuit determines who is eligible for the If the ratio of the actuarial value of assets to liabilities is increase using OLD OR NEW LAW based on the effective 70‐74% and the total return is more than 10.5% for the retirement date as stated below: prior fiscal year, 3% maximum increase to all eligible retirees and survivors. OLD LAW: based on retired effective date on/before July 1, If the ratio of the actuarial value of assets to liabilities is 2011: The old law requires that the System/Plans have a 75‐79% and the total return is more than 10.5% for the 9% rate of return and that any excess earnings over 9% go prior fiscal year, 3.5% maximum increase to all eligible into a reserve account. However, even though we did not retirees and survivor. meet the 9% rate of return, there were funds remaining in If the ratio of the actuarial value of assets to liabilities is the reserve account from fiscal year 2014/15 so we will 80% or more and the total return is more than 10.5% for deplete the reserve account this fiscal year and issue an in‐ the prior fiscal year, 4% maximum increase to all eligible crease of 1.77% to the eligible EORP retirees/survivors. retirees and survivors. The payment for July and August 1, 2015 will be issued mid‐September to the eligible EORP retirees/survivors From and after December 31, 2015, legislature may enact (with a retire date on/before July 1, 2011) and then the permanent one‐time benefit increases after an analysis of September benefit, which is scheduled to be distributed on the effect of the increase on the Plan by the Joint Legisla‐ September 30, will include the increase. tive Budget Committee (JLBC). A.R.S. § 38‐818.02.
NEW LAW: based on retired effective date on/after August As of June 30, 2015, the reserve balance for future benefit 1, 2011: The new law requires that the Plan have a 10.5% increases was $0. rate of return and the funding level of the System/Plans to be at a minimum of 60% in order to award a 2% increase. However, since we did not meet the 10.5% rate of return and the funding levels for PSPRS is not currently greater
Comprehensive Annual Financial Report 51 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
CONTRIBUTIONS Depending if you are working, inactive, or retired, read From July 1, 2013 and each fiscal year thereafter, each below for additional beneficiary details. member shall contribute 13% of compensation to the Plan on a pre‐tax basis by payroll deduction. The amount of the DEATH BENEFITS ‐ ACTIVE OR INACTIVE MEMBER member’s contribution that exceeds 7% of the member’s Spouse’s Pension. Employees who became a member on or compensation shall not be used to reduce the employer’s before December 31, 2011, the surviving spouse of an ac‐ contributions. A.R.S. § 38‐810 (G). tive or inactive member will receive a Spouse’s Pension each month for lifetime. The Spouse’s Pension is 75% of From January 1, 2014 through June 30, 2044, the EORP the member’s pension benefit based on the calculation for employers shall contribute a level percent of salary of a disability benefit. A.R.S. § 38‐806 . Employees who be‐ 23.5% to meet the normal cost plus an amount to amortize came a member on or after January 1, 2012, the surviving the unfunded accrued liability. A.R.S. § 38‐810 (C). In ad‐ spouse of an active or inactive member will receive a dition, the EORP will receive contributions from certain Spouse’s Pension each month for lifetime. The Spouse’s employers pursuant to A.R.S. §§ 12‐119.01(B)(2), 12‐ Pension is 50% of the member’s pension benefit based on 120.31(D)(2), 12‐284.03(A)(6), 22‐281(C)(3), 38‐797.05 the calculation for a disability benefit. A.R.S. § 38‐806. OR and 41‐178 as stated in A.R.S. § 38‐810. Guardian Benefit. If there is no surviving spouse, or the A member may not, under any circumstance, borrow from, pension of the surviving spouse is terminated, a Guardian take a loan against or remove contributions from the mem‐ Benefit (based on the calculation for the applicable ber’s account before the termination of membership in the Spouse’s Pension) may be paid to the guardian of the sur‐ plan or the receipt of a pension. A.R.S. § 38‐810(A). viving, eligible (unmarried) child(ren) until the child(ren) is adopted, turns 18 or until the age of 23 if the attending CREDITED SERVICE full‐time school between the ages of 18 and 23. An eligible Service for which contributions have been made, or trans‐ child’s pension shall become payable directly to the eligi‐ ferred to the Plan from another retirement system for pub‐ ble child when the eligible child reaches the age of eighteen lic employees of this state. Any leaves without pay, either (18), if the person remains eligible to receive the pension voluntary or involuntary, are not credited service. There‐ and is not subject to a guardianship or conservatorship fore, if a member was on a leave and not receiving salary due to disability or incapacity. A.R.S. § 38‐807. If the during this period of time, the member would accrue ser‐ Guardian Benefit is paid to a disabled child (the child’s dis‐ vice, but not credited service. A.R.S. § 38‐801(7). ability occurred prior to the age of 23) and remains a de‐ pendent of the guardian, the Guardian Benefit is payable to DEATH BENEFITS the disabled child for lifetime. OR Pursuant to statutes, an AUTOMATIC survivor benefit will pay your eligible spouse* and eligible child(ren)**. If there Balance of Contributions. If there is no eligible surviving is no eligible spouse or eligible child(ren), the balance of spouse or eligible child(ren), the member's named benefi‐ the applicable contributions, if any, will be paid to the ciary on file will receive the balance of the member’s accu‐ named beneficiary(ies) on file. mulated contributions. A.R.S. § 38‐808.
*Proof of recorded/filed marriage license/certificate with DEATH BENEFIT ‐ RETIRED MEMBER the Clerk of the Court or County Clerk will be required. Spouse’s Pension. Employees who became a member on or Failure to provide it may affect the continuation of health before December 31, 2011, If married for at least two (2) insurance and surviving spouse benefits. If you are receiv‐ consecutive years at the time of the member’s death, the ing a monthly benefit, statute requires two (2) consecutive surviving spouse will receive a Spouse’s Pension each years of marriage. month for lifetime based on 75% of the member's pension benefit. A.R.S. § 38‐807. Employees who became a mem‐ **Definition of an “eligible child” is unmarried, under the ber on or after January 1, 2012, If married for at least two age of 18, and/or attending full‐time school between the (2) consecutive years at the time of the member’s death, ages of 18 to 23, plus disabled child(ren) if disability oc‐ the surviving spouse will receive a Spouse’s Pension each curred before the age of 23 and who is(are) a dependent of month for lifetime based on 50% of the member's pension the member. benefit – except that at the time of retirement, a member may elect an optional form of retirement benefit, as deter‐ Note: Divorce automatically terminates the ex‐spouse as mined by the board, that provides for an actuarially re‐ the member’s beneficiary. To maintain an ex spouse as a duced pension and an increased surviving spouse’s benefit. beneficiary, you must complete a Beneficiary Designation A.R.S. § 38‐807. OR Form after the date of the divorce.
52 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
Guardian Benefit. If there is no surviving spouse, or the quired to be split, a Domestic Relations Order (DRO) will pension of the surviving spouse is terminated, a Guardian need to be prepared. To ensure that the language in the Benefit (based on the calculation for the applicable DRO is acceptable, it is recommended to provide the EORP Spouse’s Pension) may be paid to the guardian of the sur‐ with a draft copy of the DRO for review and approval prior viving, eligible (unmarried) child(ren) until the child(ren) to submitting it to the court. A.R.S. § 38‐822. is adopted, turns 18 or until the age of 23 if the attending full‐time school between the ages of 18 and 23. An eligible ELIGIBILITY child’s pension shall become payable directly to the eligi‐ Every elected official is a member of the Plan who was a ble child when the eligible child reaches the age of eighteen member of the Plan on December 31, 2013, and every full‐ (18), if the person remains eligible to receive the pension time superior court commissioner; except full‑time supe‐ and is not subject to a guardianship or conservatorship rior court commissioners who failed to make a timely elec‐ due to disability or incapacity. If the Guardian Benefit is tion of membership under the judges' retirement plan, re‐ paid to a disabled child (the child’s disability occurred pealed on August 7, 1985, who was a member of the plan prior to the age of 23) and remains a dependent of the on December 31, 2013. A state elected official who is sub‐ guardian, the surviving spouse’s pension is payable to the ject to term limits may elect not to participate in the Plan. disabled child for lifetime. A.R.S. § 38‐807 . OR A.R.S. §§ 38‐801(15) and 38‐804(A).
Balance of Contributions. If there is no eligible surviving Every elected official, justice of the supreme court, judge of spouse or eligible child(ren), the member's named benefi‐ the court of appeals and superior court, and the commis‐ ciary on file will receive the balance of the member’s accu‐ sioners that make a timely election of membership, who mulated contributions. A.R.S. § 38‐807. was hired on or after January 1, 2014 and who was not a member of the plan on December 31, 2013, will be re‐ DISABILITY quired to participate in a Defined Contribution System or A member who becomes permanently mentally or physi‐ ASRS, see Note 4. cally incapacitated for the purpose of performing the du‐ ties of the member’s office if the majority of the board of HEALTH INSURANCE physicians certifies that the member is mentally or physi‐ Pursuant to A.R.S. §§ 38‐817, 38‐651.01 and 38‐782, retir‐ cally incapacitated and is expected to be for an indefinite ees* and survivors *with 8 or more years of credited ser‐ duration. A.R.S. § 38‐806. vice that elect group health insurance and/or accident in‐ surance coverage through the Arizona State Retirement Employees who became a member on or before December System group plan (ASRS), the Arizona Department of Ad‐ 31, 2011, the disability benefit is 20% of the member's ministration (ADOA) plan, or a group plan through an em‐ average yearly salary with 4.99 or less years of credited ployer of the EORP plans, the Plan will pay up to the fol‐ service, or 40% of the member's average yearly salary with lowing amount (i.e., Premium Benefit): 5 but less than 9.99 years of credited service, or 80% of member's average yearly salary with ten (10) or more SINGLE FAMILY years of credited service. A.R.S. § 38‐808(B)(2). Not All Not All One Medicare Medicare Medicare Medicare With Pursuant to A.R.S. § 38‐808(C), employees who became a Eligible Eligible Eligible Eligible Medicare member on or after January 1, 2012, the disability benefit is: $150.00 $100.00 $260.00 $170.00 $215.00 3% of the average yearly salary multiplied by 25 years of credited service if the member had 10 or more years of Employees who become a member on/after September 12, credited service. 2013, or their survivors, will not be eligible for the Pre‐ 3% of the average yearly salary multiplied by 12.5 years mium Benefit if they are (re)employed and participates in of credited service if the member had 5.0 to 9.99 years of health care coverage provided by the member’s or survi‐ credited service. vor’s new employer. A.R.S. § 38‐817. 3% of the average yearly salary multiplied by 6.25 years of credited service if the member had 4.99 or less years * Members with 5 to 7.99 years of credited service will of credited service. receive a proportionate share of the subsidy stated above.
DIVORCE / DOMESTIC RELATIONS ORDER (DRO) JOINDERS If the member has been involved in a divorce(s), please Elected officials of an incorporated city or town may par‐ provide the EORP with a complete copy of the Divorce De‐ ticipate in the EORP if the governing body enters into a cree(s) and any attachments or exhibits if referenced in the joinder agreement in accordance with the provisions of the Decree(s). Upon receipt, additional correspondence will Plan. be provided to the parties. If the retirement account is re‐
Comprehensive Annual Financial Report 53 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
Assets under any existing public employee defined benefit ment benefits will commence the first day of month follow‐ retirement program shall be transferred to the EORP ing termination of employment to an elected official who within sixty (60) days after the employer’s effective date. has at least five (5) years of credited service and who A.R.S. § 38‐815. ceases to serve as an elected official may retire before meeting the age or service requirement for normal retire‐ REFUNDS ment The amount of an early retirement pension is 4% of Employees who became a member on or before December the member's average yearly salary multiplied by the years 31, 2011, pursuant to A.R.S. § 38‐804(B), upon termination of the member's credited service, not to exceed 80% of the of employment (for any reason other than death or retire‐ member's average yearly salary then reducing that amount ment) within twenty (20) days after filing an application by three‐twelfths of one percent for each month early re‐ with the EORP, the member will receive a lump‐sum pay‐ tirement precedes the member's normal retirement age. ment (less mandated tax withholding) of accumulated con‐ The maximum reduction is 30%.
tributions (less any benefits paid or any amounts owed to Normal Retirement. Pursuant to A.R.S. §§ 38‐801(5, 7 and the Plan) ‐ thus, forfeiting all membership rights and cred‐ 15), 38‐805(A) and 38‐808, normal retirement will com‐ ited service in the Plan upon receipt of refund of contribu‐ mence the first day of month following termination of em‐ tions. If the member has five (5) or more years of credited ployment to an elected official who ceases to hold office service, an additional percentage of contributions will be based the following age and service requirements: refunded to the member according to the member’s years Age 65 years, with 5 or more years of credited service, or of service as stated below: Age 62 years, with 10 or more years of credited service, 5 to 5.9 years of service = 25% of member contribu‐ or tions. Twenty or more years of credited service (regardless of 6 to 6.9 years of service = 40% of member contribu‐ age) tions. The amount of a normal retirement pension is 4% of the 7 to 7.9 years of service = 55% of member contribu‐ member's average yearly salary multiplied by the years of tions. the member's credited service, not to exceed 80% of the 8 to 8.9 years of service = 70% of member contribu‐ member's average yearly salary. tions. 9 to 9.9 years of service = 85% of member contribu‐ Employees who became a member on or after January 1, tions. 2012: 10 or more years of service = 100% of member contri‐ butions plus 3% interest if left on deposit after 30 Early Retirement. Early Retirement is not available.
days. Normal Retirement. Pursuant to A.R.S. §§ 38‐801(5, 7 and 15), 38‐805(B) and 38‐808, normal retirement benefits For an elected official who becomes a member on or after will commence the first day of month following termina‐ January 1, 2012, pursuant to A.R.S. § 38‐804(D), upon ter‐ tion of employment and based upon the following: mination of employment (for any reason other than death Age 65 years, with 5 or more years of credited service, or or retirement) within twenty (20) days after filing an ap‐ Age 62 years, with 10 or more years of credited service. plication with EORP, shall receive a lump‐sum payment The amount of a normal retirement pension is 3% of the plus interest at a rate determined by the board (currently member’s average yearly salary multiplied by the mem‐ 3%) as of the date of termination of ONLY their accumu‐ ber’s credited service, not to exceed 75% of the member’s lated contributions (less any benefits paid or any amounts average yearly salary. owed to the Plan) ‐ thus, forfeiting all membership rights and credited service in the Plan upon receipt of refund of RETURN TO WORK AFTER RETIREMENT contributions. The member will NOT receive the addi‐ If a retired member subsequently becomes an elected offi‐ tional percentage of contributions as stated above. cial, contributions shall not be made by the retired mem‐ ber and credited service shall not accrue while the retired Note: A member may not, under any circumstance, borrow member is holding office. § 38‐804(I). If a retired member from, take a loan against or remove contributions from the subsequently becomes, by reason of election or reelection, member’s account before the termination of membership an elected official of the same office from which the mem‐ in the plan or the receipt of a pension. A.R.S. § 38‐810(A). ber retired, within a time period following the member's retirement that is less than one full term for that office, the RETIREMENT ELIGIBILITY AND CALCULATION member shall not receive a pension. If/when the elected Employees who became a member on or before December official ceases to hold the same office, the elected official is 31, 2011: entitled to receive the same pension the elected official
Early Retirement (Reduction for Age). Pursuant to A.R.S. §§ was receiving when the elected official's pension was dis‐ 38‐801(5, 7 and 15), 38‐805(C) and 38‐808, early retire‐ continued.
54 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
Nothing in this section prohibits a retired judge called by years of credited service with the Plan that have previous the supreme court to active duties of a judge pursuant to § service with an agency of the U.S. Government, a state of 38‑813 from receiving retirement benefits. § 38‐804(J). the U.S., or a political subdivision of a state of the U.S. as may elect to redeem up to sixty (60) months of any part of Every judge retired under this plan may, if physically and the prior service if the prior service is not on account with mentally able, be subject to call by the supreme court or any other retirement system. A.R.S. § 38‐816. the chief justice of the supreme court to assist the supreme court, court of appeals or superior court under such direc‐ Purchase of Prior Forfeited Service as an Elected Official. If tions as the supreme court may give, including the exami‐ a former elected official terminates membership in the nation of the facts in cases before the court, the examina‐ Plan and takes a refund of contributions and is later re‐ tion of authorities cited and the preparation of opinions employed as an elected official may elect to purchase all of for and on behalf of the court. The court may order these the previously forfeited credited service if the elected offi‐ opinions, to the extent approved by the court, to constitute cial signs a written election within ninety (90) days after re the opinion of the court. The retired judge may, subject to ‐employment to reimburse the Plan within one (1) year any rule which the supreme court adopts, perform any after the date of re‐employment. The amount required to duties preliminary to the final disposition of cases insofar reinstate the credited service is the amount previously as they are not inconsistent with the constitution of this withdrawn plus interest at the rate of 9% compounded state. § 38‐813 . annually from the date of withdrawal to the date of repay‐ ment. A.R.S. § 38‐804(H). (Form E1B) OR Notwithstanding any provision of law to the contrary, a retired judge who is temporarily called back to the active If the statutory requirements above are not met, the duties of a judge is entitled to receive the same compensa‐ elected official may still purchase some or all of the previ‐ tion and expenses as other like active judges less any ously forfeited credited service or of elected official service amount received for that period in retirement benefits. § not covered by the Plan. The calculation is based on an 38‐813 . amount computed by the Plan’s actuary to equal the actu‐ arial present value. A.R.S. § 38‐816(B). (Form E2). Effective July 20, 2011, the employer is required to pay an alternate contribution rate on behalf of a retired member Purchase of Service Between the Arizona Retirement Plans/ who returns to work in any capacity in a position ordinar‐ Systems. (Form U2). Members of any of the four Arizona ily filled by an elected official. A.R.S. § 38‐810.04. state retirement System/Plans that have credited service under another Arizona state retirement System/Plan may Effective July 20, 2011, the premium benefit (subsidy) will redeem the credited service to their current Arizona state not apply if the retired member or survivor is reemployed retirement System/Plan by paying the full actuarial pre‐ and participates in health care coverage provided by the sent value of the credited service into the current Arizona member's or survivor’s new employer. A.R.S. § 38‐817(E). retirement System/Plan with the approval of the EORP or governing board. A.R.S. § 38‐922. SERVICE PURCHASE Purchase of Prior Active Military Service. (Form 18). Mem‐ TAXATION OF RETIREMENT BENEFITS bers who have at least ten (10) years of credited service Effective tax year January 1, 1989, all EORP retirement may purchase up to sixty (60) months of credited service benefits in excess of $2500 annually will be subject to Ari‐ for periods of active military service performed before em‐ zona state tax. A.R.S. §§ 38‐811 and 43‐1022. ployment with their current employer. A.R.S. § 38‐820. Active members may also receive credited service limited TRANSFERS to sixty (60) months if ordered/volunteered to active mili‐ Transfer of Service Between the Arizona Retirement tary service while working for the current employer if the Plans/Systems. (Form U2). Members of any of the four Ari‐ criteria is met pursuant to A.R.S. § 38‐820. The member zona state retirement System/Plans that have credited shall pay the members contributions, upon which the em‐ service under another Arizona state retirement Sys‐ ployer shall make employer contributions. tem/Plan may transfer the credited service to their current
Arizona state retirement System/Plan by transferring the If member performs military service due to presidential full actuarial present value of the credited service into the call‐up, the employer shall make the employer and em‐ current Arizona retirement System/Plan with the approval ployee contributions not to exceed forty‐eight (48) months pursuant to A.R.S.38‐820(G). For more information, con‐ of the EORP or governing board. tact your employer.
Purchase of Prior Service from an Out‐of‐State Agency. (Form EOSS). Active members who have at least five (5)
Comprehensive Annual Financial Report 55 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (EORP)
A reduced credited service amount may be transferred based on the transfer of the actuarial present value of the credited service under the prior Arizona state System/ Plan. A.R.S. §§ 38‐921 and 38‐922.
Transfer of Service Between City Retirement Plans. (Form U2E). A member of a charter city retirement system who is an elected official may apply for a transfer of service cred‐ its from the charter city retirement system to the EORP based on the actuarial present value of the service (with the member paying the difference), or the member may elect a reduced service amount to be transferred based on the actuarial present value. A.R.S. § 38‐821.
This is not an official version of the Arizona Revised Stat‐ utes. If there are any differences or discrepancies, the offi‐ cial version will prevail.
NOTE 2: CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE EORP
Prior to January 1, 2014, the Retirement System's funding policy provided for periodic employer contributions at actuarially determined rates that, expressed as percent‐ ages of annual covered payroll, designed to accumulate sufficient assets to pay benefits when due. The normal cost and actuarial accrued liability are determined using the Entry Age Normal method. Unfunded actuarial accrued liabilities and assets in excess of actuarial accrued liabili‐ ties are being amortized as a level percent of payroll over a closed period 30 year period. Employer contributions in‐ cluding court fees represented 43.31% of covered payroll [17.49% for normal costs (16.90% pension and 0.59% health insurance) and 25.82% for amortization of the un‐ funded actuarial accrued liability in aggregate (24.78% pension and 1.04% health insurance subsidy)].
As of January, 1 2014, the Arizona State Legislature closed the Elected Official’s Retirement Plan and set the employer contribution rate to 25.06% of covered payroll (23.50% for pension and 1.56% for health insurance) with an addi‐ tional five million dollars appropriated from the Arizona State Budget (Section 133 of Fiscal Year General Appro‐ priation Act).
The five million dollars from the State of Arizona is consid‐ ered a non‐employer contributing entity and is listed sepa‐ rately on the Statement of Changes in Fiduciary Position.
56 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (CORP)
NOTE 1: PLAN DESCRIPTION CORP At June 30, 2015 and 2014, the number of participating local government employer groups was: ORGANIZATION The Corrections Officer Retirement Plan (CORP), a pen‐ GROUP 2015 2014 sion trust fund of the State of Arizona, is a multiple‐ employer public employee retirement plan established by County AOC 15 15 Title 38, Chapter 5, Article 6 of the Arizona Revised Stat‐ Cities 1 1 utes, to provide benefits for prison and jail employees of Detention 14 14 certain state, county and local governments. CORP includes a cost‐sharing multiple‐employer plan for Administrative Dispatchers 8 8 Office of the Courts (CORP‐AOC) probation officers and an State Agencies 3 3 agent multiple‐employer plan for all other members. The Total Employers 41 41 Board of Trustees of the Public Safety Personnel Retire‐ ment System (PSPRS) and 26 local boards administer the CORP Plan. Any county or city in the State of Arizona may elect to have its eligible employees (generally, prison or jail personnel CORP‐AOC provides the same benefits as CORP. The sig‐ who have direct inmate contact) covered by CORP. At June nificant accounting and investment policies used for CORP 30, 2015 and 2014, statewide CORP membership consisted are also used for CORP‐AOC. of:
The Board of Trustees consists of seven members. Mem‐ RETIREMENT PLAN bers are appointed by the Governor to five year terms. The CORP- CORP- Board of Trustees is responsible for the investment of the MEMBERSHIP TYPE CORP AOC 2015 CORP AOC 2014 Plan’s assets, setting employer contribution rates in accor‐ dance with an actuarial study, adopting a budget, hiring Retirees 3,919 491 4,410 3,669 421 4,090 personnel to administer the Plan, setting up records, set‐ Terminated Vested 1,981 337 2,318 1,482 205 1,687 ting up accounts for each member, paying benefits and the Current Vested 3,907 1,072 4,979 3,776 1,096 4,872 general protection and administration of the System. Sub‐ stantial investment experience is required for the member Current Non-Vested 8,147 1,058 9,205 8,631 1,092 9,723 of the Board that represents the state as an employer and Total Members 17,954 2,958 20,912 17,558 2,814 20,372 the two public members of the Board.
Each eligible group participating in the Plan has a five‐ INSURANCE SUBSIDY member local board. In general, each member serves a fixed four‐year term. Each local board is responsible for CORP- CORP- MEMBERSHIP TYPE CORP AOC 2015 CORP AOC 2014 determining eligibility for membership, service credits, eligibility for benefits, the timing of benefit payments, and Retirees 2,306 112 2,418 2,020 176 2,196 the amount of benefits for its eligible group of employees. Terminated Vested ------The various governing bodies pay all costs associated with the administration of the local boards. Current Vested ------Current Non-Vested ------The addition or deletion of eligible groups does not require Total Members 2,306 112 2,418 2,020 176 2,196 the approval of the other participating employers. The Board of Trustees approves new eligible groups for partici‐ CORP provides retirement benefits as well as death and pation. The CORP is reported as a component unit of the disability benefits. Generally, all benefits vest after five State of Arizona. years of credited service.
A summary of benefit and plan provisions follows:
Comprehensive Annual Financial Report 57 FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (CORP)
SUMMARY OF BENEFITS Members of the plan BEFORE January 1, 2012:
PURPOSE (A.R.S. § 38‐900.01b) A. Retired member/survivor was receiving benefits on/before July 31 of two (2) previous years. To provide a uniform, consistent and equitable statewide program for those eligible corrections officers as defined B. Retired member/survivor was age 55 on July 1 and receiving by the Plan. Benefits on/before July 31 of previous year.
AVERAGE MONTHLY BENEFIT Members of the plan AFTER January 1, 2012: Employees who became a member of the Plan on or before A. Age 55 on July 1 and is receiving benefits. December 31, 2011, an average of your highest thirty‐six B. Under age 55 on July 1 and was receiving an accidental disability and (36) consecutive months of salary within the last ten (10) was receiving benefits on/before July 31 of two (2) previous years. years (i.e., 120 months) of service. A.R.S. § 38‐881(7). C. Survivor under 55 on July 1, is survivor of KIA and receiving benefits on/before July 31 of two (2) previous years. Employees who become a member of the Plan on or after January 1, 2012, an average of your highest sixty (60) con‐ From and after December 31, 2015, legislature may enact secutive months of salary within the last ten (10) years permanent one‐time benefit increases after an analysis of (i.e., 120 months) of service. the effect of the increase on the System by the Joint Legis‐ lative Budget Committee (JLBC). A.R.S. § 38‐905.03. Salary means the base salary, shift differential, military and holiday pay paid a member for personal services rendered The reserve balance as of June 30, 2015 is $0.00. in a designated position to a participating employer on a regular monthly, semi‐monthly or biweekly payroll basis. CANCER INSURANCE Salary includes amounts that are subject to deferred com‐ A cancer insurance program is administered by the PSPRS/ pensation for tax shelter agreements. For the purposes of CORP for eligible fire fighters, certified peace officers, cor‐ computing retirement benefits, “base salary” does not in‐ rections officers or detention officers. A.R.S. §§ 38‐641 clude any extra monies, including overtime pay, shift dif‐ through 38‐645. ferential pay, holiday pay, fringe benefit pay (such as uni‐ form allowance, cell phone or mileage reimbursement) and CONTRIBUTIONS similar extra payments. A.R.S. § 38‐881(41). From July 1, 2014 through June 30, 2015, all non‐ dispatchers shall contribute 8.41% of compensation and BENEFIT INCREASE (PBI) all full‐time dispatchers shall contribute 7.96% to the Plan Statutes determine the Permanent Benefit Increase (PBI) on a pre‐tax basis by payroll deduction. The contribution eligibility for the retiree’s/survivor’s and how it is calcu‐ rate for members will change each fiscal year. A.R.S. § 38‐ lated pursuant to A.R.S. §§ 38‐905 and 38‐905.02. How‐ 891(H). ever, the Fields Lawsuit determines who is eligible for the increase using OLD OR NEW LAW based on the effective A member may not, under any circumstance, borrow from, retirement date as stated below: take a loan against or remove contributions from the mem‐ OLD LAW based on retired effective date on/before July 1, ber’s account before the termination of membership in the 2011: The old law requires that the System/Plans have a plan or the receipt of a pension. A.R.S. § 38‐891(B). 9% rate of return and that one‐half of the excess earnings over 9% go into a reserve account. However, since we did CREDITED SERVICE not meet the 9% rate of return and the PSPRS reserve ac‐ Service in a designated position for which member contri‐ count had been depleted in fiscal year 2014/15, we are butions have been made to the Plan, or transferred to the unable to grant an increase for this fiscal year, 2015/16. Plan from another retirement system for public employees of this state. Any leaves without pay, either voluntary or NEW LAW based on retired effective date on/after August involuntary, are not credited service. Therefore, if a mem‐ 1, 2011: The new law requires that the plans have a 10.5% ber was on a leave and not receiving salary during this pe‐ rate of return and the funding level of the System/Plans to riod of time, the member would accrue service, but not be at a minimum of 60% in order to award a 2% increase. credited service. A.R.S. § 38‐881(11). However, since we did not meet the 10.5% rate of return and the funding levels for PSPRS is not currently greater DEATH BENEFITS than 60%, we are unable to grant an increase for this fiscal Pursuant to statutes, an AUTOMATIC survivor benefit will year, 2015/16. pay your eligible spouse* and eligible child(ren)**. If there is no eligible spouse or eligible child(ren), the balance of The chart below details the eligibility criteria based on the applicable contributions, if any, will be paid to the your membership (hire) date. named beneficiary(ies) on file.
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If there is no beneficiary, your Local Board will determine DEATH BENEFITS ‐ INACTIVE MEMBER the next‐of‐kin. A.R.S. § 38‐904(A). Balance of Contributions. If the member was inactive, the member's named beneficiary on file will receive two (2) * Proof of recorded/filed marriage license/certificate with times the member’s contributions. If the surviving benefi‐ the Clerk of the Court or County Clerk will be required. ciary does not claim the benefit, the Local Board has the Failure to provide it may affect the continuation of health authority to pay the member’s nearest of kin, or estate. insurance and surviving spouse benefits. If you are receiv‐ A.R.S. §§ 38‐881(27) and 38‐904(A). ing a monthly benefit, statute requires two (2) consecutive years of marriage. DEATH BENEFITS ‐ RETIRED MEMBER Spouse’s Pension. If married for at least two (2) consecu‐ ** Definition of an “eligible child” is unmarried, under the tive years at the time of the member’s death, the surviving age of 18, and/or attending full‐time school between the spouse will receive a Spouse’s Pension each month for life‐ ages of 18 to 23, plus disabled child(ren) if disability oc‐ time based on 80% of the member's pension benefit*. curred before the age of 23 and who is (are) a dependent A.R.S. § 38‐887 , OR of the member. Guardian Benefit. If there is no surviving spouse, or the Note: Divorce automatically terminates the ex‐spouse as pension of the surviving spouse is terminated, and there is the member’s beneficiary. To maintain an ex spouse as a at least one (1) eligible child, a Guardian Benefit of 80% beneficiary, you must complete a Beneficiary Designation (based on the member's pension) may be paid to the Form after the date of the divorce. guardian of the (unmarried) child(ren) each month until each child turns 18, or under 23 years of age only during Depending if you are working, inactive, or retired, read any period that the (unmarried) child is a full‐time student. below for additional beneficiary details. An eligible Child’s Pension shall become payable directly to the eligible child when the eligible child reaches the age of DEATH BENEFITS ‐ ACTIVE MEMBER 18, if the person remains eligible to receive the pension Spouse’s Pension. The surviving spouse of an active mem‐ and is not subject to a guardianship or conservatorship ber will receive a Spouse’s Pension each month for life‐ due to disability or incapacity. A.R.S. § 38‐904(B). time. The Spouse’s Pension is 40% of the member's aver‐ age monthly salary. If the member was killed in the line of If a Guardian Benefit is paid to a disabled child (the child’s duty, the spouse will receive 100% of the member’s aver‐ disability occurred prior to the age of 23) and remains a age monthly benefit compensation. A.R.S. § 38‐888, OR dependent of the guardian, the benefit is payable for the lifetime of the child. A.R.S. §§ 38‐881(19) and 38‐904(B), Guardian Benefit. If there is no surviving spouse, or the OR pension of the surviving spouse is terminated, and there is at least one (1) eligible child, a Guardian Benefit of 40% Balance of Contributions. If there is no surviving spouse or (based on the member's average monthly salary) may be eligible child(ren), the member's named beneficiary on file paid to the guardian of the (unmarried) child(ren) each will receive the balance of the member's accumulated con‐ month until each child turns 18, or under 23 years of age tributions less the pension payments made to the member. only during any period that the (unmarried) child is a full‐ If the surviving beneficiary does not claim the benefit, the time student. An eligible Child’s Pension shall become pay‐ Local Board has the authority to pay the member’s nearest able directly to the eligible child when the eligible child of kin, or estate. A.R.S. §§ 38‐889 and 38‐904(A). reaches the age of 18, if the person remains eligible to re‐ ceive the pension and is not subject to a guardianship or *If the retiree was receiving benefits under a “prior law,” conservatorship due to disability or incapacity. A.R.S. § 38‐ the surviving spouse benefits are contingent based on the 904(B). option the member selected upon retirement. To find out the option the member selected, please reference the prior If a Guardian Benefit is paid to a disabled child (the child’s law section of the Notification of Benefits and Election disability occurred prior to the age of 23) and remains a (Form C12). dependent of the guardian, the benefit is payable for the lifetime of the child. A.R.S. § 38‐904(B), OR ACCIDENTAL DISABILITY A physical or mental condition which totally and perma‐ Balance of Contributions. If there is no surviving spouse or nently prevents an employee from performing a reason‐ eligible child(ren), the member's named beneficiary on file able range of duties within the employee's department, will receive two (2) times the member’s contributions. If that was incurred in the performance of the employee's the surviving beneficiary does not claim the benefit, the duties and was the result of either physical contact with Local Board has the authority to pay the member’s nearest inmates, or responding to a confrontational situation with of kin, or estate. A.R.S. § 38‐904(A and B). inmates, or a job‐related motor vehicle accident,
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and was not the result of a physical or mental condition vents an employee from performing a reasonable range of that existed or occurred before the employee’s date of duties within the employee’s department, or a mental con‐ membership in the Plan. A member shall file an application dition that totally and permanently prevents the employee for a disability pension after the disabling incident or from engaging in any substantial gainful activity, and was within one year after the date the member ceases to be an not the result of a condition that existed or occurred before employee by reason of disability. A.R.S. § 38‐881(1). the employee’s date of membership in the Plan. Dispatch‐ ers disabled on/after September 21, 2006 and non dis‐ Eligibility for an accidental disability will be determined by patchers disabled on/after September 26, 2008 may qual‐ the Local Board upon an independent medical examina‐ ify for an ordinary disability. A member shall file an appli‐ tion. For members with a membership date on or be‐ cation for a disability pension after the disabling incident fore December 31, 2011, the monthly benefit is 50% of or within one year after the date the member ceases to be the member's average monthly compensation. (There is an employee by reason of disability. A.R.S. §§ 38‐881(30) no credited service requirement.) For members with a and 38‐886.01. membership date on or after January 1, 2012 with less than 25 years of credited service, the monthly benefit is Eligibility for an ordinary disability will be determined by 50% of the member's average monthly compensation. For the Local Board upon an independent medical examina‐ members with 25 or more years of credited service, the tion. The monthly benefit is a percentage of normal retire‐ monthly benefit is 62.5% of the member's average ment based on the employee’s years of credited service monthly compensation. The Local Board may require peri‐ divided by twenty (20) for membership on or before odic medical re‐evaluations of the continuation of the acci‐ December 31, 2011 (except a full‐time dispatcher, the dental disability. Accidental disability terminates if the service requirement is 25 years), or twenty‐five (25) for Local Board finds the retired member no longer meets the membership on or after January 1, 2012. The Local requirements for the disability benefit. A.R.S. § 38‐886. Board may require periodic medical re‐evaluations until the member reaches age 62. Ordinary disability termi‐ TOTAL AND PERMANENT (CATASTROPHIC) DISABILITY nates if the Local Board finds the retired member no A physical or mental condition which totally and perma‐ longer meets the requirements for the disability benefit. nently prevents a member from engaging in any gainful A.R.S. § 38‐886.01. employment, that is in the direct and proximate result of the member's performance of the employee’s duties and is DIVORCE / DOMESTIC RELATIONS ORDER not the result of a physical or mental condition or injury If the member has been involved in a divorce(s), please that existed or occurred before the member's date of mem‐ provide the CORP with a complete copy of the Divorce De‐ bership in the Plan. A member shall file an application for a cree(s) and any attachments or exhibits if referenced in the disability pension after the disabling incident or within one Decree(s). Upon receipt, additional correspondence will year after the date the member ceases to be an employee be provided to the parties. If the retirement account is by reason of disability. A.R.S. § 38‐881(45). required to be split, a Domestic Relations Order (DRO) will need to be prepared. To ensure that the language in the Eligibility for a total and permanent disability will be de‐ DRO is acceptable, it is recommended to provide the CORP termined by the Local Board upon an independent medical with a draft copy of the DRO for review and approval prior examination. For members with a membership date on to submitting it to the court. A.R.S. § 38‐910. or before December 31, 2011, the monthly benefit is 50% of the member's average monthly compensation. ELIGIBILITY (There is no credited service requirement.) For members Designated positions for the following employers that elect with a membership date on or after January 1, 2012 to join the Plan are eligible to participate in the CORP if the with less than 25 years of credited service, the monthly employee’s customary employment is for at least forty benefit is 50% of the member's average monthly compen‐ (40) hours per week, or as defined by statute. A.R.S. § 38‐ sation. For members with 25 or more years of credited 881(13): service, the monthly benefit is 62.5% of the member's av‐ For a County: A county detention officer and non‐ erage monthly compensation. The Local Board may re‐ quire periodic medical re‐evaluations until the member uniformed employee’s of a sheriff's department whose reaches age 62. The total and permanent disability termi‐ primary duties require direct inmate contact. nates if the Local Board finds the retired member no For the State Department of Corrections and the Depart‐ longer meets the requirements for the disability benefit. ment of Juvenile Correction: Specific positions are eligible A.R.S. § 38‐886. to participate. Refer to the statute for specific positions. For a City or Town, a City or Town Detention Officer. ORDINARY DISABILITY For an employer of an eligible group as defined in A.R.S. § A physical condition which totally and permanently pre‐ 38‐881, full‐time dispatchers.
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For the judiciary, probation, surveillance, and juvenile SINGLE FAMILY detention officers and those positions designated by the Not All Not All One Local Board. Medicare Medicare Medicare Medicare With For the Department of Public Safety, state detention offi‐ Eligible Eligible Eligible Eligible Medicare cers. $150.00 $100.00 $260.00 $170.00 $215.00
Dispatchers hired after November 24, 2009 must partici‐ pate in the Arizona State Retirement System. A.R.S. § 38‐ Retirees with a membership (hire) date on/before Septem‐ 902(C). ber 11, 2013 that meet the “Returning to Work after Re‐ tirement” qualifications and that are re‐employed by a par‐ GARNISHMENTS ticipating CORP employer, may be eligible to have their As permitted by statute and upon receipt of acceptable active medical/dental insurance subsidized (retroactive to legal documentation directing our office, if the member is September 2013) up to the amount of the premium, but no retired, we may withhold from a members retirement (or more than the amount as allowed by statute. A.R.S. § 38‐ disability) benefit for child support payments, Domestic 906. Relation Orders and/or Levy from the Internal Revenue Service (IRS). However, if we receive any other garnish‐ New employees with a membership (hire) date on/after ment or judgment, or receive any garnishment or judg‐ September 12, 2013 (or their eligible survivors), will not ment for a member that is currently working, we will take be eligible for the Premium Benefit when they retire and if it under advisement with the Arizona Attorney General’s they become re‐employed with a CORP employer and par‐ Office. A.R.S. § 38‐897. ticipate in active health care coverage provided by the members or survivors CORP employer. However, as stated If you are retired (or receiving a disability retirement) and in the beginning of this section, retirees and eligible survi‐ your child support payments are expected to stop, the vors that elect retiree group health insurance may be eli‐ clearinghouse or court will be required to provide our of‐ gible for the Premium Benefit. A.R.S. § 38‐906. fice with a stop order (i.e., Order Stopping Order of Assign‐ ment or Termination of Income Withholding Order, If a law enforcement officer, as defined in A.R.S. § 38‐1114, etc). Additionally, if your Levy is expected to stop, it is re‐ is killed in the line of duty, the eligible surviving spouse or quired that we receive a Release of Levy from the IRS. dependent(s) are entitled to insurance benefits either by the former employer, or from the state retirement system Please note that child support and levy payments are tax‐ from which the spouse or dependent is receiving benefits. able income to you. Therefore, if you would like to make The health insurance premium amount payable by the em‐ any changes to your Federal and/or State withholding, you ployer of the deceased law enforcement officer is the may access the withholding forms from the PSPRS website amount the employer of the deceased law enforcement at http://www.psprs.com/. Benefit payments issued to an officer would pay for an active law enforcement officer for ex‐spouse become taxable income to the ex‐spouse; how‐ a family coverage premium or single coverage premium, ever, for additional information pursuant to the Domestic whichever is applicable. For additional eligibility require‐ Relations Order, please refer to the “Divorce and Domestic ments, refer to A.R.S. § 38‐1114. Relations Order (DRO) FAQ.” JOINDERS Our cut‐off to process any changes to your account is the Specific positions and employers may participate in the 10th of the month. If the orders are received by the clear‐ CORP if the governing body of the employer enters into a inghouse, court or IRS by the 10th of the month, the change joinder agreement to bring such employees into the CORP. will occur with the payment paid at the end of that The joinder agreement shall be in accordance with the pro‐ month. If received after the 10th of the month, the change visions of this Plan. The transfer of the Arizona defined will occur with the payment at the end of the following benefit state retirement System or Plan shall be trans‐ month. ferred within ninety days after the employer’s effective date. A.R.S. § 38‐902. HEALTH INSURANCE Pursuant to A.R.S. §§ 38‐906, 38‐651.01 and 38‐782, retir‐ LOCAL BOARD ees and eligible survivors under the System that elect Each employer that participates in the PSPRS is required to group health insurance and/or accident insurance cover‐ be vested in a 5‐person board that determines PSPRS eligi‐ age through the Arizona State Retirement System group bility and benefits pursuant to statutes. (If a member plan (ASRS), the Arizona Department of Administration needs contact information for the Local Board Secretary or (ADOA) plan, or a group plan through an employer of the representative, the CORP can assist with providing the CORP plans, the System may pay up to the following contact information.) A.R.S. § 38‐893. amount Premium Benefit amount:
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REFUNDS The local board of the state department of corrections, the Employees who became a member on or before December department of juvenile corrections or the local board of a 31, 2011, pursuant to A.R.S. § 38‐884, upon termination of county, city or town that operates detention facilities may employment (for any reason other than death or retire‐ specify a designated position within the department as a ment) within twenty (20) days after filing an application non‐designated position if the position is filled by an em‐ with the CORP, the member will receive a lump‐sum pay‐ ployee who has at least five years of credited service under ment (less mandated tax withholding) of accumulated con‐ the Arizona State Retirement System and who provides a tributions (less any benefits paid or any amounts owed to written request to the local board (within 90 days of being the Plan) ‐ thus, forfeiting all membership rights and cred‐ transferred) to specify the position as a non‐designated ited service in the Plan upon receipt of refund of contribu‐ position. When the employee leaves the position, the posi‐ tions. If the member has five (5) or more years of credited tion reverts to a designated position. A.R.S. § 38‐891(F). service, an additional percentage of contributions will be refunded to the member according to the member’s years The local board of the judiciary may specify positions of service as stated below : within the Administrative Office of the Courts (CORP‐AOC)
5 to 5.9 years of service = 25% of additional member that require direct contact with and primarily provide contributions. training or technical expertise to county probation, surveil‐ 6 to 6.9 years of service = 40% of additional member lance or juvenile detention officers as a designated posi‐ contributions. tion if the position is filled by an employee who is a mem‐ 7 to 7.9 years of service = 55% of additional member ber of the Plan currently employed in a designated position contributions. as a probation, surveillance or juvenile detention officer 8 to 8.9 years of service = 70% of additional member that has at least five years of credited service under the contributions. Plan. An employee who fills such a position shall make a 9 to 9.9 years of service = 85% of additional member written request to the local board to specify the position as contributions. a designated position within ninety days of accepting the 10 or more years of service = 100% of member contri‐ position. When the employee leaves the position, the posi‐ butions plus 3% interest if left on deposit after 30 days. tion reverts to a non‐designated position. A.R.S. § 38‐891 (G). Employees who became a member on or after January 1, 2012, pursuant to A.R.S. § 38‐884(E), upon termination of RETIREMENT ELIGIBILITY AND CALCULATION employment (for any reason other than death or retire‐ Employees who became a member on or before December ment) within twenty (20) days after filing an application 31, 2011: with CORP, shall receive a lump‐sum payment of ONLY their accumulated contributions plus interest at a rate de‐ Normal Retirement. Pursuant to A.R.S. §§ 38‐881 (7, 11, 27, termined by the board (currently 3%) as of the date of ter‐ 28, 41 and 43) and 38‐885, retirement benefits will com‐ mination (less any benefits paid or any amounts owed to mence the first day of month following termination of em‐ the Plan) ‐ thus, forfeiting all membership rights and cred‐ ployment and based upon the following: ited service in the Plan upon receipt of refund of contribu‐ 20 years of credited service but less than 25 years of tions. The member will NOT receive the additional per‐ credited service, or 80 points (age plus credited service) centage of contributions as stated above. if membership date is on/after 8/9/01: 50% of the member’s average monthly salary plus 2% of member’s A member may not, under any circumstance, borrow from, average monthly salary multiplied by each year of cred‐ take a loan against or remove contributions from the mem‐ ited service over 20 (include fractional years). ber’s account before the termination of membership in the 25 years of credited service for dispatchers, or 80 points plan or the receipt of a pension. A.R.S. § 38‐891(B). (age plus credited service) if membership date is on/ after 8/9/01: 50% of the member’s average monthly REQUEST TO REMAIN IN CORP salary plus 2.5% of member’s average monthly salary The local board of the state department of corrections, or multiplied by each year of credited service over 20 the department of juvenile corrections may specify a posi‐ (include fractional years). (12‐years maximum so that tion within the department as a designated position if the the benefit does not exceed the 80% of the average position is filled by an employee who has at least five (5) monthly salary) years of credited service under the Plan, is transferred to 20 years of service but less than 20 years of credited ser‐ temporarily fill the position, provides a written request to vice, or 80 points if membership date is on/after 8/9/01: the local board (within 90 days of being transferred) to Member’s average monthly salary multiplied by each specify the position as a designated position. When the year of credited service (include fractional years) multi‐ employee leaves the position, the position is no longer a plied by 2.5%. designated position. A.R.S. § 38‐891(E). (Form C20)
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80 points (age plus credited service) if membership date RETURN TO WORK AFTER RETIREMENT is PRIOR to 8/9/01: Member’s average monthly salary A retired member may become re‐employed and continue multiplied by each year of credited service (include frac‐ to receive a pension if the employment occurs twelve (12) tional years) multiplied by 2.5% (maximum 75% of aver‐ months or more after retirement. The retired member age monthly salary). shall not contribute to the fund and shall not accrue cred‐ Age 62 with 10 years of service but less than 20 years of ited service. A.R.S. § 38‐884(K). credited service: Member’s average monthly salary mul‐ tiplied by each year of credited service (include fractional If a retired member becomes employed by an employer in years) multiplied by 2.5%. a designated position before twelve (12) months after re‐ tirement, the retired member’s pension shall be suspended Note: The maximum pension is capped at 80% of the aver‐ during reemployment in a designated position and the re‐ age monthly salary (which a person would receive at 32 tired member shall not make contributions to the Plan nor years of credited service). accrue credited service during such reemployment. A.R.S. § 38‐884(K). Deferred Annuity. Inactive members (not making contri‐ butions to the Plan) that have at least ten (10) years of If you are receiving an accidental or total and permanent credited service may elect to receive a Deferred Annuity at disability retirement (and have not reached normal retire‐ the age of sixty‐two (62). This annuity is a lifetime ment) and have become employed by an employer under monthly payment that is actuarially equivalent to the the Plan, your disability retirement will cease. However, member’s accumulated contributions in the Plan plus an your local board will need to review and determination equal amount paid by the employer. This annuity is not a your return to work eligibility. If benefits are suspended retirement benefit and annuitants are not entitled to survi‐ and upon eligibility for (re)retirement, the service from the vor benefits, benefit increases, or the group health insur‐ disabilty retirement will be considered “service” and not ance subsidy. A.R.S. § 38‐911(A). “credited” service and your average monthly compensa‐ tion will be based on the compensation from the new em‐ Employees who became a member on or after January 1, ployment. A.R.S. § 38‐886 (D and G). 2012: If a retired member returns to work in any capacity in a Normal Retirement. Pursuant to A.R.S. §§ 38‐881 (7, 11, 27, designated position ordinarily filled by an employee, the 28, 41 and 43) and 38‐885, retirement benefits will com‐ employer is required to pay an alternate contribution rate mence the first day of month following termination of em‐ to the CORP. From July 1, 2015 through June 30, 2016, the ployment and based upon the following: alternate contribution rate is 11.33%. A.R.S. § 38‐891.01.
Age 62 with 10 years of service: 62.5% of the member’s REVERSE DEFERRED RETIREMENT OPTION PLAN average monthly salary plus 2.5% of the average monthly Beginning July 1, 2006 and through June 30, 2016, the salary multiplied by each year of credited service over 25 CORP shall offer the Reverse Deferred Retirement Option (include fractional years). Plan (Reverse DROP) to members that are eligible for a Age 52.5 with 25 or more years of credited service: normal pension (based on service and age) applicable to a 62.5% of the member’s average monthly salary plus membership date that is either prior to, or after January 1, 2.5% of the average monthly salary multiplied by each 2012 (who is not awarded an accidental, ordinary or total year of credited service over 25 (include fractional and permanent disability pension). Under the Reverse years). DROP, the member must voluntarily and irrevocably elect Age 52.5 with 25 years of service but less than 25 years to terminate employment and receive a normal retirement of credited service: Average monthly salary multiplied upon participation in the Reverse DROP. The Reverse by the member’s total credited service multiplied by DROP date is the first day of the month immediately fol‐ 2.5%. lowing completion of required credited service, or a date not more than sixty (60) consecutive months before the Employees who became a member on or after January 1, date the member elects to participate in the Reverse DROP, 2012 are not eligible for a “Deferred Annuity.” However, a whichever is later. member who attains the service requirement for a normal retirement, but does not meet the age requirement, may In basic terms, if a member elects to participate in the Re‐ elect to leave contributions on account until reaching the verse DROP, the years of service credit cannot go below 24 age requiremeny and then elect to receive a retirement (non‐dispatcher), or 25 (dispatcher) years of service credit benefit (survivor benefits, benefit increases, or the group after the Reverse DROP months are applied. The maximum health insurance subsidy). A.R.S. § 38‐911(B). number of months that a member could elect to reverse is 60 months (5 years).
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The member’s pension will be calculated using the factors with an agency of the U.S. Government, a state of the U.S., of credited service and average monthly benefit compensa‐ or a political subdivision of a state of the U.S. as a full‐time tion in effect on the Reverse DROP Date. The lump sum paid corrections officer, or full‐time paid certified peace distribution is credited as though it accrued monthly from officer may elect to redeem up to sixty (60) months of any the Reverse DROP date to the date the member elected to part of the prior service if the prior service is not on ac‐ participate in the Reverse DROP (plus interest equal to the count with any other retirement system. A.R.S. § 38‐909. yield on a five (5) year Treasury note as of the first day of the month as published by the Federal Reserve Board). Purchase of Prior Forfeited Service within the SAME Retire‐ ment Plan. If a former member becomes RE‐EMPLOYED Neither the member nor the employer is entitled to a re‐ with the SAME EMPLOYER and, within two (2) years after fund of contributions made between the Reverse DROP the former member's termination date and applies with date and the date the member elects to participate in the the Plan (within ninety days of reemployment), may elect Reverse DROP. A.R.S. § 38‐885.01. to purchase all of the previously forfeited credited service. The amount required to reinstate the credited service is Pursuant to statute, the Reverse DROP option will no the amount previously withdrawn plus interest at the rate longer be available after June 30, 2016. A.R.S. § 38‐885.01. of 9% compounded annually from the date of withdrawal to the date of repayment and the reimbursement is re‐ SALARY quired to be paid within one (1) year from the date of re‐ Salary means the base salary, shift differential pay, military employment. A.R.S. § 38‐884(I). (Form C1B), OR differential wage pay and holiday pay paid a member for personal services rendered in a designated position to a If the statutory requirements above are not met, the mem‐ participating employer on a regular monthly, semimonthly ber may still purchase some or all of the previously for‐ or biweekly payroll basis. Salary includes amounts that are feited credited service calculated based on an amount com‐ subject to deferred compensation or tax shelter agree‐ puted by the Plan’s actuary to equal the actuarial present ments. Salary does not include payment for any remunera‐ value of the account. A.R.S. § 38‐884(J). (Form C2). tion or reimbursement other than as prescribed by this paragraph. Purchase of Service Between the Arizona Retirement Plans/ Systems. (Form U2). Members of any of the four Arizona For the purposes of this paragraph, "base salary" means state retirement System/Plans that have credited service the amount of compensation each member is regularly under another Arizona state retirement System/Plan may paid for personal services rendered to an employer before redeem the credited service to their current Arizona state the addition of any extra monies, including overtime pay, retirement System/Plan by paying the full actuarial pre‐ shift differential pay, holiday pay, fringe benefit pay and sent value of the credited service into the current Arizona similar extra payments. A.R.S. § 38‐881(42). retirement System/Plan with the approval of the CORP or governing board. A.R.S. § 38‐922. SERVICE PURCHASE Purchase of Prior Active Military Service. (Form 18). Mem‐ TAXATION OF RETIREMENT BENEFITS bers with at least ten (10) years of credited service with All CORP retirement benefits in excess of $2,500 annually the Plan may purchase up to sixty (60) months of credited will be subject to Arizona state tax. A.R.S. §§ 38‐896, and service for periods of active military service performed 43‐1022. before employment with their current employer (even if the member receives a military pension). A.R.S. § 38‐907 TRANSFERS (A). Active members may also receive credited service Transfer of Contributions Between CORP Employers. (Form limited to sixty (60) months if ordered/volunteered to ac‐ C1A). A member who terminates employment with an em‐ tive military service while working for the current em‐ ployer and accepts a position with the same or another ployer if the criteria is met pursuant to A.R.S. § 38‐907. employer participating in the Plan shall have their credited The member shall pay the members contributions, upon service transferred to their record with the new employer which the employer shall make employer contributions. If if they leave their accumulated contributions on deposit member performs military service due to presidential call‐ with the Plan. The period not employed shall not be con‐ up, the employer shall make the employer and employee sidered as credited service. A.R.S. § 38‐908. contributions not to exceed forty‐eight (48) months pursu‐ ant to A.R.S.38‐907 (G). For more information, contact Transfer of Service Between the Arizona Retirement Plans/ your employer. Systems. (Form U2). Members of any of the four Arizona state retirement System/Plans that have credited service Purchase of Prior Service from an Out‐of‐State Agency. under another Arizona state retirement System/Plan may (Form COSS). Active members with at least five (5) years transfer the credited service to their current Arizona state of credited service with the Plan that have previous service retirement System/Plan by transferring the full actuarial
64 Comprehensive Annual Financial Report FINANCIAL SECTION
PLAN SPECIFIC NOTES TO THE FINANCIAL STATEMENTS (CORP) present value of the credited service into the current Ari‐ zona retirement System/Plan with the approval of the CORP or governing board. A reduced credited service amount may be transferred based on the transfer of the actuarial present value of the credited service under the prior Arizona state System/Plan. A.R.S. §§ 38‐921 and 38‐ 922.
Transfer of Service Between Municipal Retirement Systems & Special Retirement Plans. (Form U2A). An active or inac‐ tive member of a retirement System or Plan of a municipal‐ ity of this state (i.e., City of Phoenix and City of Tucson) or of the CORP may transfer the service to their current retire‐ ment System or Plan based on the member’s accumulated contributions plus interest, or the member may elect a re‐ duced service amount to be transferred based on the actu‐ arial present value. A.R.S. §§ 38‐923 and 38‐924.
This is not an official version of the Arizona Revised Stat‐ utes. If there are any differences or discrepancies, the offi‐ cial version will prevail.
NOTE 2: CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE CORP
The Retirement System's funding policy provides for peri‐ odic employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and actuarial accrued liability are determined using the Entry Age Normal cost method. Unfunded actuarial accrued liabilities and assets in excess of actuarial accrued liabilities are being amortized as a level percent of payroll over a 21 year period. Beginning July 1, 2007, the minimum employer contribution rate was established at 6%. A.R.S. 38‐891.
During the year ended June 30, 2015 contributions were made in accordance with contribution requirements deter‐ mined by an actuarial valuation of the Plan as of June 30, 2013. Employer contributions, including CORP‐AOC, repre‐ sented 14.46% of covered payroll [7.12% for normal costs (6.78% pension and .34% health insurance) and 7.34% for amortization of unfunded actuarial accrued liability in ag‐ gregate (6.45% pension and .89% health insurance sub‐ sidy)]. CORP‐AOC cost‐sharing employer contributions represented 16.12% of covered payroll [6.97% for normal costs (6.67% pension and .30% health insurance) and 9.15% for amortization of unfunded actuarial accrued li‐ ability in aggregate (8.21% pension and .94% health insur‐ ance subsidy)]. Member contributions, for both CORP and CORP‐AOC, represented 8.41% (7.96% for dispatchers).
Comprehensive Annual Financial Report 65 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
NOTE 3: NET PENSION LIABILITY The long‐term expected rate of return on pension plan in‐ vestments was determined using a building‐block method Not applicable to PSPRS and CORP, but is applicable to in which best estimate ranges of expected real rates of re‐ EORP and CORP‐AOC. Only cost‐sharing plans are required turn (expected returns, net of pension plan investment to report the net pension liability, EORP and CORP‐AOC. expense ) are developed for each major class. The geomet‐ PSPRS and CORP are agent‐multiple plans so this note is ric method is the best method used to calculate the average not applicable to PSPRS and CORP. rate per period on an investment that is compounded over multiple periods. DETERMINATION OF TOTAL PENSION LIABILITY The actuarial assumptions used for the total pension liabil‐ EORP: The total pension liability shown in this subsection ity are as follows: is also shown as of the last date of the pension plan’s fiscal year, June 30, 2015. A single discount rate of 4.86% was Valuation Date: June 30, 2015 used to measure the total pension liability. This single dis‐ Actuarial Cost Method: Entry Age Normal count rate was based on an expected rate of return on pen‐ Amortization Method: Level Dollar, Closed sion plan investments of 7.85% and a municipal bond rate of 3.80% (20‐year Bond Buyer Index as published by the Remaining Amort. Period: 21yr Federal Reserve, as of June 25, 2015). The projection of Asset Valuation Method: Fair Value cash flows used to determine this single discount rate as‐ Actual Contrib. Amounts: Amounts are according to Section 38-810, sumed that plan member contributions will be made at the Arizona Revised Statutes: 23.50% of aggregate current contribution rate and that employer contributions payroll for 30 years. Includes $5 million will be made at rates set by statute and non‐employer con‐ appropriation from a non-employer contributing tributions. Based on these assumptions, the pension plan’s member, the State of Arizona fiduciary net position and future contributions were suffi‐ Investment Rate of Return: 7.85% cient to finance the benefit payments through the year 2028. As a result, the long‐term expected rate of return on Projected Salary Increases: 4.25% pension plan investments was applied to projected benefit Payroll Growth: 4.00% payments through the year 2028, and the municipal bond rate was applied to all benefit payments after that date. Retirement Age: Experience based table of rates specific to the type of eligibility condition.
EXPECTED RETURN - GEOMETRIC BASIS Mortality: RP-2000 mortality table projected to 2025 using TARGET ASSET ALLOCATION scale AA (unadjusted Male and Female)
LONG-TERM Assumed Future P.B.I.: Members Retired on or before July 1, 2011: REAL EXPECTED 3.00% of benefit. RETURN PORTFOLIO Members Retired on or after August 1, 2011: TARGET GEOMETRIC REAL RATE 0.50% of benefit. ASSET CLASS ALLOCATION BASIS OF RETURN
Short Term Investments 2.00% 0.75% 0.02% The assumptions above are used for calculating the total pension liability and are different than those used for the Absolute Return 5.00% 4.11% 0.21% calculation of funding and contribution rates. Actuarial Risk Parity 4.00% 5.13% 0.21% assumptions used in the June 30, 2014 valuation were Fixed Income 7.00% 2.92% 0.20% based on the results of an actuarial experience study for the 5‐year period ended June 30, 2011. Real Assets 8.00% 4.77% 0.38%
GTAA 10.00% 4.38% 0.44% MEASUREMENT OF NET PENSION LIABILITY Private Equity 11.00% 9.50% 1.05% Real Estate 10.00% 4.48% 0.45% The net pension liability is to be measured as the total pen‐ sion liability, less the amount of the pension plan’s fiduci‐ Credit Opportunities 13.00% 7.08% 0.92% ary net position. As of the plan year ending June 30, 2015, Non-U.S. Equity 14.00% 8.25% 1.16% the net pension liability is $781,451,299. If a single dis‐ U.S. Equity 16.00% 6.23% 1.00% count rate that is 1% lower was used, the net pension li‐ ability would have been $909,707,897. Similarly, if a single Total 100.00% 6.01% discount rate that was 1% higher was used, the net pen‐ Inflation 3.00% sion liability would have been $673,594,229. Total Pension Liability for FY 2015 is $1,090,119,723. The Plan’s Fiduci‐ Expected Arithmetic Nominal Return 9.01% ary Net Position is $308,668,424 which is 28.32% of Total Pension Liability.
66 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
SENSITIVITY OF THE NET PENSION LIABILITY The assumptions above are used for calculating the total TO THE SINGLE DISCOUNT RATE ASSUMPTION pension liability and are different than those used for the (IN THOUSANDS) calculation of funding and contribution rates. Actuarial CURRENT assumptions used in the June 30, 2014 valuation were SINGLE based on the results of an actuarial experience study for 1% RATE 1% the 5‐year period ended June 30, 2011. DECREASE ASSUMPTION INCREASE 3.86% 4.86% 5.86%
Total Pension Liability 1,218,376 1,090,120 982,263 EXPECTED RETURN - GEOMETRIC BASIS Plan Fiduciary Net Position 308,668 308,668 308,668 TARGET ASSET ALLOCATION Net Pension Liability 909,708 781,452 673,594 LONG-TERM REAL EXPECTED RETURN PORTFOLIO CORP‐AOC: The total pension liability shown in this sub‐ TARGET GEOMETRIC REAL RATE ASSET CLASS ALLOCATION BASIS OF RETURN section is also shown as of the last date of the pension plan’s fiscal year, June 30, 2015. A single discount rate of Short Term Investments 2.00% 0.75% 0.02% 7.85% was used to measure the total pension liability. This Absolute Return 5.00% 4.11% 0.21% single discount rate was based on the expected rate of re‐ Risk Parity turn on pension plan investments of 7.85%. The projection 4.00% 5.13% 0.21% of cash flows used to determine this single discount rate Fixed Income 7.00% 2.92% 0.20% assumed that plan member contributions will be made at Real Assets 8.00% 4.77% 0.38% the current contribution rate and that employer contribu‐ GTAA 10.00% 4.38% 0.44% tions will be made at rates equal to the difference between actuarially determined contribution rates and the member Private Equity 11.00% 9.50% 1.05% rate. Based on these assumptions, the pension plan’s fidu‐ Real Estate 10.00% 4.48% 0.45% ciary net position was projected to be available to make all Credit Opportunities 13.00% 7.08% 0.92% projected future benefit payments of current plan mem‐ bers. Therefore, the long‐term expected rate of return on Non-U.S. Equity 14.00% 8.25% 1.16% pension plan investments was applied to all periods of pro‐ U.S. Equity 16.00% 6.23% 1.00% jected benefit payments to determine the total pension Total 100.00% 6.01% liability. The actuarial methods for CORP‐AOC were the same as CORP aggregate. Inflation 3.00% Expected Arithmetic Nominal Return 9.01% The actuarial methods and assumptions used for the pen‐ sion liability are as follows: The long‐term expected rate of return on pension plan in‐ Valuation Date: June 30, 2015 vestments was determined using a building‐block method Actuarial Cost Method: Entry Age Normal in which best‐estimate ranges of expected future real rates of return (expected returns, net of pension plan invest‐ Amortization Method: Level % of Payroll, Closed ment expense and inflation) are developed for each major Remaining Amort. Period: 21yr asset class. The geometric method is the best method used Asset Valuation Method: Fair Value to calculate the average rate per period on an investment that is compounded over multiple periods. 4.00%, no explicit price inflation assumption Inflation: Investment Rate of Return: 7.85% MEASUREMENT OF NET PENSION LIABILITY The net pension liability is to be measured as the total pen‐ Projected Salary Increases: 4.00%-7.25% sion liability, less the amount of the pension plan’s fiduci‐ Payroll Growth: 4.00% ary net position. As of the plan year ending June 30, 2015, the net pension liability is $243,126,717. If a single dis‐ Retirement Age: Experience based table of rates specific to the type of eligibility condition. count rate that is one percent lower was used, the net pen‐ sion liability would have been $317,884,439. Similarly, if a Mortality: RP-2000 mortality table (adjusted by 105% for single discount rate that was one percent higher was used, Males and Females) the net pension liability would have been $180,909,155. Assumed Future P.B.I.: Members Retired on or before July 1, 2011: Total Pension Liability for FY2015 is $577,419,466. The 2.25% of benefit. Plan’s Fiduciary Net Position is $334,292,749 which is Members Retired on or after August 1, 2011: 0.50% of benefit. 57.93% of Total Pension Liability.
Comprehensive Annual Financial Report 67 FINANCIAL SECTION
SENSITIVITY OF THE NET PENSION LIABILITY EORP, and does not timely opt out of EODC to return to TO THE SINGLE DISCOUNT RATE ASSUMPTION ASRS, s/he is automatically enrolled in EODCRS, the invest‐ (IN THOUSANDS) ment options of which will be administered by third‐party CURRENT administrator. The elected official will contribute to and SINGLE participate in the Elected Officials’ Defined Contribution 1% RATE 1% Retirement System Disability Program administered by DECREASE ASSUMPTION INCREASE 6.85% 7.85% 8.85% EODCRS.
Total Pension Liability 652,177 577,419 515,202 Through HB 2608, beginning January 1, 2014 and continu‐ Plan Fiduciary Net Position 334,293 334,293 334,293 ing for 30 years, employer contributions equal 23.5% of Net Pension Liability 317,884 243,126 180,909 aggregate payroll. Aggregate payroll is on behalf of active members in the Arizona Elected Official’s Retirement Plan (EORP), active members in the Elected Officials’ Defined Contribution Retirement System (EODCRS), and active NOTE 4: ELECTED OFFICIALS’ DEFINED members in the Arizona State Retirement System (ASRS) CONTRIBUTION SYSTEM who opt out of EODCRS because they had money on ac‐ count with ASRS. Only applicable to EORP. The employer contributions are used to pay for:
As part of 2013 legislation, House Bill 2608 effectively 1) EORP Defined Benefits = Employer Normal Cost plus an closed the Elected Officials’ Retirement Plan (EORP) and amount to amortize the unfunded accrued liability; created the Elected Officials’ Defined Contribution Retire‐ 2) EODCRS Defined Contribution = 6% of pay for those ment System (EODCRS), with an effective date of January 1, electing EODCRS, first effective January 1, 2014; and 2014. All employers who are in EORP are required to be in 3) ASRS Defined Benefits = Employer’s contribution the EODCRS. This is to ensure that the legacy costs of amount. EORP are continued to be funded by those employers whose members contribute to that liability. Elected Offi‐ Additionally, in fiscal years 2013‐14 through 2042‐43, the cials who are elected, appointed, or hired on or after Janu‐ sum of $5,000,000 is appropriated in each fiscal year from ary 1, 2014 have one of three different paths that may be the state general fund to EORP to supplement the Normal available to them. Cost plus an amount to amortize the unfunded accrued liability. Path 1: Elected Officials’ Retirement Plan. ARS § 38‐801 restricts membership in EORP to elected officials defined therein who are members of the plan on December 31, NOTE 5: OTHER BENEFITS 2013. Member is not defined, but has always included ac‐ tive and inactive members. Inactive is not defined, either, The System adopted a supplemental defined contribution but they are only considered inactive if they are not ac‐ plan for all contributing members of an eligible group. An tively contributing, but have left their money on ac‐ eligible group is defined as the employees of the Board of count. Therefore, if a person has EORP time on account or Trustees, PSPRS, the EORP and the CORP. The employees is appointed, elected, or hired on or before December 31, of any of these eligible groups must make an election to 2013 they are required to be in EORP. participate within two years after the employee first meets the eligibility requirements to participate in the plan. The Path 2: Arizona State Retirement System. As prescribed in election to participate is irrevocable and continues for the ARS § 38‐727, if a person is appointed, elected, or hired on remainder of the employee’s employment with the em‐ or after January 1, 2014 and does not have prior EORP ployer. If an employee elects to participate, the employee time, but has ASRS time, that person has the option to re‐ must contribute at least 1% of the employee’s gross com‐ turn to ASRS. If that person chooses ASRS, that choice pensation. The IRS maintains that the employers designate must be made in writing and filed with ASRS within 30 the amounts contributed by each employee. All amounts days after that person’s term begins. That decision is ir‐ contributed are subject to the discretion and control of the revocable during the term in which that election was employer. Employee contributions and earnings to the made. Additionally, the member has the option to partici‐ plan are immediately vested. Employer contributions, if pate in either the EODC or ASRS Plan with each term. The any, are vested based on the following schedule:
elected official will contribute to and participate in the Less than one year of service 0% Long‐Term Disability Program administered by ASRS. One year but less than two 20% Two years but less than three 40% Path 3: Elected Officials’ Defined Contribution Retirement Three years but less than four 60% System. If a person is elected, appointed, or hired on or Four years but less than five 80% after January 1, 2014, does not have time on account with Five years or more 100%
68 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
The System administers the supplemental defined contri‐ ported amounts and assumptions about the probability of bution plan through Nationwide Retirement Solutions, Inc. events far into the future, and the actuarially determined All contributions are sent directly to Nationwide Retire‐ amounts are subject to continual revision as actual results ment Solutions, Inc. from the participating employer are compared to past expectations and new estimates are groups. made about the future. Actuarial calculations reflect a long‐ term perspective. Consistent with this perspective, actuar‐ ial methods and assumptions used include techniques that NOTE 6: FUNDING STATUS AND PROGRESS are designed to reduce short‐term volatility in actuarial accrued liabilities and the actuarial value of assets. The HEALTH INSURANCE actuarial calculations are based on the benefits provided The required schedule of funding progress for health in‐ under the terms of the Plan in effect at the time of each surance premium subsidy immediately following the notes valuation. These benefits are described in Note 1 under to the financial statements presents multi‐year trend infor‐ “Summary of Benefits”. mation about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. NOTE 7: BASIS FOR ALLOCATION
The actuarial methods and assumptions used for the The basis for allocation relates to the net assets and is health insurance premium subsidy benefits are as follows: based on the balances of the bank of record, BNY Mellon. The allocation between pension and health insurance is Valuation Date: June 30, 2015 based on the reserve balances as of June 30, 2015. Actuarial Cost Method: Entry Age Normal
Amortization Method: Level % of Payroll, Closed Description Pension Health Ins Total Plan Total System Remaining Amort. Period: 21yr Closed for U.A.A.L. PSPRS 72.54% 3.69% Asset Valuation Method: 7yr Smoothed Market Value, 80%/120% Market Total PSPRS 76.23% Investment Rate of Return: 7.85% EORP 3.68% 0.27% Proj. Salary Increases (EO) 4.25% including inflation of 4.00% Total EORP 3.96% As of June 30, 2015 health insurance premium subsidy for CORP 14.49% 1.22% PSPRS has assets in excess of $20,943,243 for a funding ratio of 107.1%. The assets for the health insurance pre‐ CORP-AOC 4.01% 0.09% mium subsidy were $315,353,511 with liabilities of Total CORP 19.81% $294,410,268. The excess is (1.49)% of covered payroll, $1,401,178,245. TOTAL SYSTEM 100.00%
The EORP health insurance premium subsidy has assets in excess of $10,682,621 for a funding ratio of 186.42%. The NOTE 8: SUMMARY OF SIGNIFICANT ACCOUNTING assets for the health insurance premium subsidy were POLICIES AND PLAN ASSET MATTERS $23,043,536 with liabilities of $12,360,915. The excess is (17.25)% of covered payroll, $61,933,383. BASIS OF ACCOUNTING The System’s financial statements are prepared using the Health insurance premium subsidy for CORP has assets of accrual basis of accounting. Member and employer contri‐ $10,474,737 for a funding ratio of 110.38%. The assets for butions are recognized when due, pursuant to formal com‐ health insurance premium subsidy were $103,581,998 mitments, as well as statutory or contractual require‐ with liabilities of $83,822,858. The excess is (3.91)% of ments. Pension and Health Insurance subsidy benefits are covered payroll, $505,904,780. recognized when due and payable in accordance with the terms of the Plan. Refunds are due and payable by state As of June 30, 2015 the CORP‐AOC cost‐sharing plan health law within 20 days of receipt of a written application for a insurance premium subsidy had liabilities of $9,284,403 refund. Refunds are recorded when paid. for a funding ratio of 45.54%. The assets for the CORP‐AOC health insurance premium subsidy were $7,763,891 with Furniture, fixtures and equipment purchases costing liabilities of $17,048,294. The liability is 8.41% of covered $10,000 or more, when acquired, are capitalized at cost. payroll, $110,362,697. Improvements, which increase the useful life of the prop‐ erty, are also capitalized. Actuarial valuations involve estimates of the value of re‐
Comprehensive Annual Financial Report 69 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
Investment income net of administrative and investment tions with a balance of up to $250,000 (permanently guar‐ expenses are allocated to each employer group based on anteed as of July 21, 2010) insured by the Federal Deposit the average relative fund size for each employer group for Insurance Corporation (FDIC). The System mitigates cus‐ that year. Administrative fees are paid from Investment todial credit risk for deposits by requiring the financial returns and in cases where there is a loss, the fees are paid institutions to pledge securities from an acceptable list in from contributions. an amount at least equal to 102% of the aggregate amount of the deposits on a daily basis. By state statute, the Plan is required to provide informa‐ tion in the financial statements used to calculate Net Effec‐ All monies shall be secured by the depository in which tive Yield. Net Effective Yield includes only realized gains they are deposited and held to the same extent and in the and losses. The Net Realized Gains (Losses) used in this same manner as required by the general depository law of calculation totaled $429,452,358 for FYE 2015 and the state. Cash balances represent both operating and cash $539,810,246 for FYE 2014. This calculation is independ‐ accounts held by the bank and investment cash on deposit ent of the calculation of the change in the market value of with the investment custodian. All deposits are carried at investments and may include unrealized amounts from cost plus accrued interest. The following table is a sched‐ prior periods. ule of the aggregate book and bank balances of all cash accounts as of June 30, 2015: GASB Statement 66, Technical Corrections – 2012 an amendment of GASB Statements No. 10 and No. 62, was is‐ REPORTED AMOUNT BANK BALANCE sued and is effective for periods beginning after December 15, 2012. There is no effect on the EORP financial state‐ Pension Trust Fund 390,332,091 390,332,091 ments. The GASB has issued Statement No. 67, Financial Operating Fund 5,309,141 21,753,324 Reporting for Pension Plans; an amendment of GASB State‐ Total Deposits 395,641,232 412,085,415 ment No. 25 This Statement replaces the requirements of Statements No. 25 and No. 50 related to pension plans that
are administered through trusts or equivalent arrange‐ MONEY‐WEIGHTED RATE OF RETURN ments. The requirements of Statements No. 25 and No. 50 The money‐weighted rate of return on investments for remain applicable to pension plans that are not adminis‐ FY2015 was 3.984%, $322,896,201 and 13.302%, tered through trust or equivalent arrangements. The re‐ $959,355,910 for FY 2014. The calculation is less invest‐ quirements of this Statement are effective for financial ment expenses of $6,318,972. The money‐weighted rate of statements for fiscal years beginning after June 15, 2013. return expresses investment performance, net of invest‐ The requirements of this statement have been imple‐ ments expense, adjusted for the changing amounts actually mented in the EORP Financial Statements. GASB State‐ invested. ment No. 68, Accounting and Financial Reporting for Pen‐ sions and amendment of GASB Statement No. 27. GASB 70, INVESTMENTS Accounting and Financial Reporting for Nonexchange Finan‐ The System’s investments are reported at Market Value. cial Guarantees, was issued and is effective for periods be‐ Market Values are determined as follows: Short‐term in‐ ginning after June 15, 2013. There is no effect on the EORP vestments are reported at cost plus accrued interest. Eq‐ financial statements. uity securities are valued at the last reported sales price. Fixed‐income securities are valued using the last reported ESTIMATES sales price or the estimated market value as determined by The preparation of financial statements in conformity with fixed‐income broker/dealers plus accrued interest. Invest‐ accounting principles generally accepted in the United ments in hedge funds are valued monthly at the last re‐ States of America requires management to make estimates ported valuations. and assumptions that affect the reported amounts of net assets held in trust for pension benefits at June 30, 2015. Limited partnership investments in credit opportunities, Actual results could differ from those estimates. private equity, real assets and real estate are valued on a quarterly or monthly basis at last reported valuations ad‐
NOTE 9: CASH AND INVESTMENTS justed by any subsequent cash flows.
CASH Statutes enacted by the Arizona Legislature authorize the Custodial credit risk for deposits is the risk that in the Board of Trustees to make investments in accordance with event of a bank failure, the System’s deposits may not be the "Prudent Man" rule. The Board of Trustees is not lim‐ returned. The deposits are held in two financial institu‐ ited to so‐called "Legal Investments for Trustees."
70 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
In making every investment, the board shall exercise the A.R.S. § 38‐848.B as amended in 2008 authorized the judgment and care under the circumstances then prevail‐ Board of Trustees to commingle the assets of all the plans ing which men of ordinary prudence, discretion and intelli‐ entrusted to its management, subject to the crediting of gence exercise in the management of their own affairs, not receipts and earnings and charging of payments to the ap‐ in regard to speculation but in regard to the permanent propriate employer, system or plan. As a result, the vari‐ disposition of their funds, considering the probable income ous assets of the Public Safety Retirement System, Elected from their funds as well as the probable safety of their Officials’ Retirement Plan, and the Corrections Officer Re‐ capital, provided: tirement Plan were unitized beginning September 1, 2008
1)That not more than eighty percent of the combined as‐ into the PSPRS Trust. Investments for each fund are allo‐ sets of the system or other plans that the board manages cated daily via a constant dollar unitization methodology. shall be invested at any given time in corporate stocks, Realized and unrealized gains are allocated monthly using based on cost value of such stocks irrespective of capital the same methodology. appreciation. 2)That not more than five percent of the combined assets At June 30, 2015, the fair value of the PSPRS Trust and the of the system or other plans that the board manages allocation for each system and plan was as follows: shall be invested in corporate stock issued by any one corporation, other than corporate stock issued by corpo‐ PLAN UNITIZED PERCENT rations chartered by the United States government or PSPRS Pension 6,075,461,002 72.54% corporate stock issued by a bank or insurance company. 3)That not more than five percent of the voting stock of PSPRS Health Ins. 308,662,276 3.69% any one corporation shall be owned by the system and EORP Pension 308,652,796 3.68% other plans that the board administers, except that this EORP Health Ins. 22,596,853 0.27% limitation does not apply to membership interests in limited liability companies. CORP Pension 1,205,496,844 14.49% 4) That corporate stocks and exchange traded funds eligi‐ CORP Health Ins. 101,615,627 1.22% ble for purchase shall be restricted to stocks and ex‐ CORP-AOC Pension 334,292,749 4.01% change traded funds that, except for bank stocks, insur‐ ance stocks and membership interests in limited liability CORP-AOC Health Ins. 7,616,560 0.09% companies, are either: TOTAL 8,364,394,707 100.00% a) Listed or approved on issuance for listing on an ex‐ change registered under the Securities Exchange Act of 1934, as amended (15 United States Code §78a through §78ll); CUSTODIAL CREDIT RISK b) Designated or approved on notice of issuance for Custodial Credit Risk is the risk that the System will not be designation on the national market system of a na‐ able (a) to recover deposits if the depository financial in‐ tional securities association registered under the Se‐ stitution fails or (b) to recover the value of the investment curities Exchange A, Act of 1934, as amended (15 or collateral securities that are in the possession of an out‐ United States Code §78a through §78ll). side party if the counterpart to the investment or deposit c) Listed or approved on issuance for listing on an ex‐ transaction fails. As of June 30, 2015, the System has no change registered under the laws of this [Arizona] fund or deposits that were not covered by depository in‐ state or any other state. surance or collateralized with securities held by our banks’ d) Listed or approved on issuance for listing on an ex‐ trust department or agent. Nor does the System have any change of a foreign country with which the United investments that are not registered in the name of the Sys‐ States is maintaining diplomatic relations at the time tem, and are either held by the counterpart or the counter‐ of purchase, except that no more than twenty per cent part’s trust department or agent. The system's cash is not of the combined assets of the system and other plans collateralized by Wells Fargo, but is pooled with the State that the board manages shall be invested in foreign of Arizona Treasurer. securities, based on the cost value of the stocks irre‐ spective of capital appreciation. CREDIT RISK e) An exchange traded fund that is recommended by the Credit Risk is the risk that an issuer or other counterparty chief investment officer of the system, that is regis‐ to an investment will not fulfill its obligation to the System. tered under the investment company act of 1940 (15 As of June 30, 2015, the System’s fixed income assets that United States Code Section 80a‐1 through 80a‐64) were not government guaranteed represented 98.7% of and that is both traded on a public exchange and the fixed income portfolio. based on a publicly recognized index.
Comprehensive Annual Financial Report 71 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
Each portfolio is managed in accordance with investment RATINGS DISPERSION DETAIL guidelines that are specific as to permissible credit quality CREDIT ranges, exposure levels within individual quality tiers, and RATING CORPORATE the average credit quality of the overall portfolios. to those LEVEL BONDS guidelines, the fixed income portfolio must have a mini‐ AAA - mum weighted average quality rating of A3/A‐. Fixed in‐ come securities must have a minimum quality rating of AA 12,957,520 Baa3/BBB– at the time of purchase. A 23,393,418
BBB 16,306,960 The portion of the bond portfolio in securities rated Baa3/ BBB– through Baa1/BBB+ must be 20% or less of the fair BB 1,208,955 value of the fixed income portfolio. B - CCC 101,499 Included in the fixed income portfolio are cash equivalents or commercial paper. Commercial Paper must have a CC - minimum quality rating of A‐1/P‐1 at the time of purchase. C 1,106,897 Investments in derivatives are limited to collateralized Not Rated 569,647,246 mortgage obligations (CMO), collateralized bond obliga‐ tions (CBO), collateralized debt obligations (CDO), and as‐ Total 624,722,495 set‐backed securities (ABS). INTEREST RATE RISK In preparing this report, collateral for securities lending Interest rate risk is the risk that changes in interest rates has been excluded because it is invested in a securities will adversely affect the market value of an investment. lending collateral investment pool. The following tables This risk is managed within the portfolio using segmented summarize the System’s fixed income portfolio exposure time distributions. It is widely used in the management of levels and credit qualities. fixed income portfolios in that it quantifies the risk of in‐ terest rate changes. The System does invest in fixed in‐ CONCENTRATION OF CREDIT RISK come securities with floating rates that contain coupon Concentration of credit risk is the risk of loss that may be adjustment mechanisms in a rising interest rate environ‐ attributed to the magnitude of a government’s investment ment. in a single issue. Other than bonds used as direct obliga‐ tions of and fully guaranteed by the U.S. Government, not The following tables quantify, to the fullest extent possible, more than 5% of the Fund or its fixed income portfolio at the interest rate risk of the System’s fixed income assets. fair value shall be invested in bonds issued by any one in‐ stitution, agency or corporation. SEGMENTED TIME DISTRIBUTION BY SECURITY TYPE (INCLUDING GOVERNMENT GUARANTEED SECURITIES) (IN THOUSANDS) AVERAGE CREDIT QUALITY AND EXPOSURE LEVELS FIXED OF NON-GOVERNMENT GUARANTEED SECURITIES INCOME FAIR VALUE % OF FIXED WEIGHTED SECURITY <1 1-5 6-10 11-15 16-20 >20 JUNE 30, INCOME AVG. Corporate - 39,821 6,567 10,792 2,974 564,568 FIXED SECURITY TYPE 2015 ASSETS CREDIT Agencies - - - - - 7,721 Corporate Bonds 624,722,495 100.0% A Mortgages ------Mortgages - 0.0% - CBO ------CBO - 0.0% - Total - 39,821 6,567 10,792 2,974 572,289 Total 624,722,495 100.0%
CALLABLE BONDS BY SECURITY TYPE (INCLUDING GOVERNMENT GUARANTEED SECURITIES) FIXED INCOME MARKET VALUE % OF ALL FIXED SECURITY TYPE JUNE 30, 2015 INCOME ASSETS Corporate - 0.00% Agencies - 0.00%
Totals - 0.00%
72 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
FOREIGN CURRENCY RISK policy that specifically authorizes external investment Foreign currency risk is the risk that changes in the foreign managers to enter into certain derivative contracts based exchange rate will adversely impact the market value of an on an analysis that the use of such derivatives will have a investment. The System is allowed to invest part of its as‐ positive impact on the Trust’s ability to manage its under‐ sets in foreign investments. The following table shows the lying assets and liabilities. The System Trust investment System’s exposure to foreign currency risk (U. S. dollars): program, indirectly through its external managers, holds investments in futures contracts. The external money FOREIGN CURRENCY RISK managers enter into these certain derivative instruments (IN THOUSANDS) primarily to enhance the performance and reduce the vola‐ tility of the System portfolio, to gain or hedge exposure to SHORT CURRENCY TERM EQUITY OTHER TOTAL certain markets, and to manage interest rate risk. The ex‐ ternal managers are required to follow certain controls, AUSTRALIAN DOLLAR 88 46,157 0 46,245 documentation and risk management procedures when BRAZIL REAL 62 14,766 0 14,828 employing these financial instruments. CANADIAN DOLLAR 109 58,971 0 59,080 The fair value exposure associated with these derivative CHILEAN PESO 0 1,933 0 1,933 instruments was recorded on the financial statements as a COLOMBIAN PESO 28 913 0 941 portion of the unrealized gains and losses related to U.S. CZECH KORUNA 11 304 0 314 Equity and Fixed Income. The total of unrealized loss for the System was $1,551,901 at June 30, 2015 consisting of DANISH KRONE 3 9,598 0 9,601 U.S. Equity (loss of $1,560,073) and Risk Parity (gain of EURO CURRENCY UNIT 2,384 194,673 114,245 311,302 $8,172). Interest risk associated with these investments HONG KONG DOLLAR 209 65,872 0 66,081 are included in the tables on page 76.
HUNGARIAN FORINT 12 367 0 380 SECURITY LENDING PROGRAM INDONESIAN RUPIAH 17 3,644 0 3,662 The System is party to a securities lending agreement with ISRAELI SHEKEL 14 3,436 0 3,450 a bank. The bank, on behalf of the System, enters into agreements with brokers to loan securities and have the JAPANESE YEN 1,393 150,614 0 152,007 same securities returned at a later date. The loans are fully MALAYSIAN RINGGIT 19 5,436 0 5,455 collateralized primarily by cash. Collateral is marked‐to‐ MEXICAN NEW PESO 24 8,577 0 8,601 market on a daily basis. Non‐cash collateral can be sold NEW TAIWAN DOLLAR 483 23,331 0 23,814 only upon borrower default. The Plan requires collateral of at least 102% of the fair value of the loaned U.S. Govern‐ NEW TURKISH LIRA 40 2,522 0 2,561 ment or corporate security. Securities on loan are carried NEW ZEALAND DOLLAR 26 1,193 0 1,219 at fair value. NORWEGIAN KRONE 144 5,595 0 5,739 As of June 30, 2015 the fair value of securities on loan was PHILIPPINES PESO 28 2,373 0 2,401 $332,039,096 and the collateral was $342,053,154 for the POLISH ZLOTY 24 2,563 0 2,588 System. The System receives a negotiated fee for its loan POUND STERLING 930 131,479 50,674 183,083 activities and is indemnified for broker default by the secu‐ rities lending agent. The System participates in a collateral S AFRICAN COMM RAND 29 14,283 0 14,312 investment pool. All security loans may be terminated on SINGAPORE DOLLAR 61 8,491 0 8,552 demand by either the lender or the borrower. All matched SOUTH KOREAN WON 48 28,208 0 28,256 loans shall have matched collateral investments.
SWEDISH KRONA 63 19,585 0 19,648 The total cash collateral investments received for un‐ SWISS FRANC 428 57,779 0 58,207 matched loans (any loan for which the cash collateral has THAILAND BAHT - 2,312 0 2,312 not been invested for a specific maturity) will have a maxi‐ mum effective duration of 233 days. And, at least 20% of TOTAL MARKET VALUE 6,676 864,975 164,919 1,036,570 total collateral investments shall be invested on an over‐ night basis. At June 30, 2015, the weighted average matur‐ DERIVATIVES ity was 84 days for all investments purchased with cash Derivative instruments are financial contracts whose val‐ collateral from unmatched loans. The System has no credit ues depend on the values of one or more underlying assets, risk because the amounts owed to the borrowers exceed reference rates, or financial indexes. They include futures the amounts the borrowers owe to the System. contracts, options contracts, and forward foreign currency exchange. The Board of Trustees has adopted a derivative
Comprehensive Annual Financial Report 73 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
Prior to the current fiscal year, under this program, the SCHEDULE OF CAPITAL ASSET ACCOUNT BALANCES Plan has not experienced any defaults or losses on these BUILDING FURNITURE TOTAL loans. However, in November 2008 the System was in‐ IMPROVE- FIXTURES CAPITAL LAND MENTS EQUIPMENT ASSETS formed that due to recent market events one or more secu‐ rities lending collateral vehicles that held assets have been CAPITAL ASSETS impaired. This potential liability will be realized upon set‐ June 30, 2014 615,169 4,624,065 1,559,373 6,798,607 tlement of the recovery process or if there becomes a li‐ Additions 0 0 123,391 123,391 quidity issue with the collateral pool. Deletions 0 0 0 0
TOTAL % OF June 30, 2015 615,169 4,624,065 1,682,764 6,921,998 AVAILABLE AVAILABLE ASSET CLASS OUT ON LOAN TO LOAN TO LOAN ACCUMULATED DEPRECIATION Equities 237,640,686 314,755,875 75.5% June 30, 2014 0 (1,154,665) (1,289,551) (2,444,216) Agencies - - - Additions 0 (131,800) (118,421) (250,221) Treasuries - - - Deletions 0 0 0 0 Exchange Traded 94,398,410 943,984,100 10.0% June 30, 2015 0 (1,286,465) (1,407,972) (2,694,437) Totals 332,039,096 1,258,739,975 26.4% Net Capital Assets 615,169 3,337,600 274,792 4,227,561
VALUATION PROCESS FOR NON‐EXCHANGE NOTE 11: HEALTH INSURANCE PREMIUM SUBSIDY TRADED INVESTMENTS The System does not value any non‐publicly traded assets. The plan description, summary of significant accounting All of the System’s non‐publicly‐traded assets are managed policies, investment policies and contributions required by external managers, who value the investments under for the health insurance subsidy are the same as the retire‐ their management in accordance with their established ment plan and can be found under Notes 1, 5 and 8. The valuation policies, which may include discounted cash flow health insurance premium subsidy provided by A.R.S. §38‐ methodologies (such as purchase offers) or market compa‐ 857 consists of a fixed dollar amount set by statute and rable pricing is otherwise unavailable or appears impru‐ paid by the System on behalf of eligible retired members. dent to employ. Upon receipt of an external manager’s The subsidized health benefits are provided and adminis‐ valuation of assets under its management, that valuation is tered by the Arizona State Retirement System, Arizona provided to the System’s custodian bank which then re‐ Department of Administration or the participating em‐ flects the valuation on the System’s books of account. ployer of the retired member. According to Governmental Accounting Standards Board (GASB) Statement No. 43, the health insurance subsidy paid by the Plan represents other NOTE 10: CAPITAL ASSETS post employment benefits. As of July 1, 2013 the Plan ad‐ ministers a separate healthcare plan as defined under IRC These assets are stated at cost, and depreciable assets are §401(h). In addition, the Plan is statutorily authorized, by depreciated using the straight‐line method over the esti‐ A.R.S. §38‐857, to maintain a separate account for the mated life of the asset. Repairs and maintenance are health insurance subsidy assets and benefit payments. The charged to expense as incurred. Depreciation expense for Health Insurance assets are accounted for by employer, June 30, 2015 was $250,221. and are available to pay only Health Insurance benefit .
The following table is a schedule of the capital asset ac‐ count balances as of June 30, 2015, and June 30, 2014, and NOTE 12: PLAN TERMINATION changes to those account balances during the year ended June 30, 2015. The System is administered in accordance with Arizona statutes. These statutes do provide for termination of the plans under A.R.S. 41‐3016.18. The plans are scheduled to terminate on July 1, 2016. However, based on the Auditor General’s sunset review and performance audit, the Legis‐ lative Committee of Reference held a hearing on November 18, 2015 and recommended to the full Legislature that the System continue for eight more years beginning July 1, 2016. This recommendation will be considered during the 2016 legislative session beginning in January of that year.
74 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
NOTE 13: CONTINGENCIES BENEFITS The ASRS provides benefits under formulas and provisions Some of our real estate partners in the investments catego‐ described in Arizona State law. Benefits and administrative rized as “other investments” have obtained third party expenses are paid from funds contributed by members and financing, which is secured by real property. The System employers and from earnings on investments. The ASRS has entered into Capital Call Agreements with regards to provides for retirement, disability, health insurance pre‐ these third party financing arrangements. The Capital Call mium supplemental benefits and survivor benefits. Agreements, in the unlikely event of default, limit the Sys‐ tem to the amount of the defaulted payment or the original Retirement benefits are calculated on the basis of age, total terms of the investment approved by the Board of Trus‐ credited service and average monthly compensation, tees, whichever is less. In management’s opinion, any loss which is established on a fiscal year basis (July 1 to June realized due to current economic conditions will not have a 30). material effect on the financial statements. Members with an initial membership date before July 1, As stated in Note 9 – Cash and Investments (under the Se‐ 2011, are eligible for full retirement benefits upon the ear‐ curity Lending Program heading), the System was notified liest of attaining: in November 2008 of a situation involving one or more Age 65; security lending collateral vehicles that held assets which Age 62 with 10 years of credited service; OR have been impaired as a result of recent market events. An Age plus credited service equaling 80 or more estimate of the unrealized loss is approximately $3.3 mil‐ lion dollars for the System and has been recorded as a li‐ Members with initial membership dates on or after July 1, ability. It is anticipated that a final resolution will be 2011, are eligible for full retirement benefits upon the ear‐ reached in next few fiscal years. liest of attaining:
Age 65; NOTE 14: PENDING LAWSUITS Age 62 with 10 years of credited service; Age 60 with 25 years of credited service; OR In compliance with the Supreme Court decision regarding Age 55 with 30 years of credited service permanent benefit increase (PBI) payments, the Public Safety Personnel Retirement System issued a retroactive Average monthly compensation is determined by a 60‐ permanent benefit increase payment for its eligible mem‐ month or 36‐month calculation depending on when a bers (those members who retired effectively on or before member began contributing to the ASRS. July 1, 2011). We are still awaiting the outcomes of the others lawsuits filed in the Superior Court of Arizona in The 60‐month calculation is an option for members who Maricopa County that challenged Senate Bill 1609 in 2011. began contributing to the ASRS before January, 1, 1984. To determine a member’s benefit using this formula, the ASRS averages the highest 60 consecutive months of salary NOTE 15: DEFINED BENEFIT PENSION PLANS within the last 120 months of service. This calculation in‐ cludes base salary, additional contracts, overtime and any The employees of the System are covered under the Ari‐ other form of compensation. Termination payments may zona State Retirement System (ASRS) for pension benefits include sick pay (except for state and county employees), after retirement. vacation pay, compensation time pay, retirement incentive pay (excludes payments made after retirement begins, PLAN DESCRIPTION such as VIP or ESP), or any other payments paid at the time of retirement. The average monthly compensation for ORGANIZATION members who began contributing before January 1, 1984 The Arizona State Retirement System (ASRS) is a compo‐ is automatically based on whichever calculation provides nent unit of the State of Arizona. The ASRS is a cost‐ the greater benefit. sharing, multiple‐employer, pension plan established by the State of Arizona to provide pension benefits for em‐ The 36‐month calculation is required for members who ployees of the State and employees of participating politi‐ began contributing to the ASRS on or after January 1, 1984. cal subdivisions and school districts. The ASRS is adminis‐ To determine a member’s benefit using this formula, the tered in accordance with Title 38, Chapter 5, Article 2 of ASRS averages the highest 36 consecutive months of salary the Arizona Revised Statutes (A.R.S.). The Long Term Dis‐ within the last 120 months of service. This calculation ex‐ ability Program is administered in accordance with Title cludes any termination payments the member received 38, Chapter 5, Article 2.1. upon retirement.
Comprehensive Annual Financial Report 75 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
For members who began contributing to the ASRS on or ployer contributions, member contributions and invest‐ after July 1, 2011, the average monthly compensation used ment earnings. in a retiring member’s retirement benefit calculation is the average of the highest consecutive 60 months in the last Employers are also required to pay an Alternate Contribu‐ 120 months. Unlike the pre‐1984 60 month calculation, the tion Rate (ACR), for retired members who return to work. 60 month calculation enacted in 2011 does not include termination pay such as sick leave, annual leave etc. Employers’ contractually required contribution rates as a percentage of covered payroll and the employees’ match‐ The graded multiplier is a percentage set by Arizona State ing contributions were as follows for fiscal year 2015: statute. It is the percentage of the average monthly com‐ pensation members will receive for each year of credited CONTRIBUTION RATES EMPLOYEE EMPLOYER service they have accrued at retirement. This percentage is Retirement 11.48% 10.89% based on their total years of service at retirement based on the following graded multiplier schedule: Health Benefit Supplement 0.00% 0.59% Long-Term Disability 0.12% 0.12%
YEARS OF SERVICE MULTIPLIER TOTAL REQUIRED 11.60% 11.60%
00.00 - 19.99 years 2.10% Alternate Contribution Rate 9.57% 0.00% 20.00 - 24.99 years 2.15% 25.00 - 29.99 years 2.20% State statutes allow the purchase of eligible service credit 30.00 or more years 2.30% for which no benefit can be paid by another qualified plan. Purchasable services include leave of absence, military PERMANENT BENEFIT INCREASE (PBI) service, other public service employment and previously Retired members who have been retired one year and forfeited service under the ASRS. Statutes also allow pur‐ members receiving LTD benefits are eligible for a benefit chase of military service regardless of whether a benefit increase adjustment up to a maximum of 4%. may be paid. The Systems contributions to ASRS were $423,785 for the year ended June 30, 2015. Retired members with at least 10 years of service who have been retired five or more years are eligible for an en‐ TERMINATION OF EMPLOYMENT hanced permanent benefit increase (EPBI). For each com‐ Upon termination of employment, members may elect to plete five‐year period the member has been retired, an receive their contributions made to the Plan, plus accrued incremental benefit is paid if monies to pay the benefit are interest. Members with an initial membership date before available. This benefit is funded by an interest credit of 8% July 1, 2011, may receive a percentage of employer contri‐ of the reserve for future PBIs. butions to the plan based on years of service as follows:
The PBI is paid from a reserve of excess investment earn‐ YEARS OF SERVICE VESTING ings. Funds are reserved when total actuarial investment 5.00 - 5.99 years 25.00% returns for each fiscal year are 8% or greater. If there are no excess investment earnings in the reserve, then no addi‐ 6.00 - 6.99 years 40.00% tional benefit increase is paid. As of June 30, 2015, there is 7.00 - 7.99 years 55.00% a zero balance in the reserve for future PBIs. 8.00 - 8.99 years 70.00%
Due to legislation enacted in the 2013 legislative session, 9.00 - 9.99 years 85.00% PBIs and EPBIs will not be awarded to members hired af‐ 10.00 or more years 100.00% ter September 13, 2013. Members with an initial membership date on or after July CONTRIBUTIONS 1, 2011 will not receive any portion of the employer con‐ Per Arizona Revised Statutes, contribution requirements tributions if they withdraw their account balance prior to for active plan members and their participating employers retirement. This does not apply to terminations due to an are established and may be amended by the ASRS Board. employer reduction in force or position elimination, in Contribution rates are actuarially determined and are ex‐ which case the above ASRS vesting schedule will apply. pected to finance the costs of benefits earned by plan members during the year and any unfunded accrued liabil‐ ity. Cost of administering the plan is financed through em‐
76 Comprehensive Annual Financial Report FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
Withdrawal of accumulated contributions results in forfei‐ asset class. These ranges are combined to produce the long ture of the member’s accrued benefits in the Plan; how‐ ‐term expected rate of return by weighting the expected ever, state law provides for reinstatement of a member’s future real rates of return by the target asset allocation forfeited service upon repayment of the accumulated con‐ percentage and by adding expected inflation. Best esti‐ tributions, plus interest if a former member returns to cov‐ mates of arithmetic real rates of return for each major as‐ ered service. set class included in the pension plan’s target asset alloca‐ tion as of June 30, 2014 are summarized in the following For purposes of measuring the net pension liability, de‐ table: ferred outflows of resources and deferred inflows of re‐ sources related to pensions, and pension expense, informa‐ EXPECTED RETURN ARITHMETIC BASIS tion about the fiduciary net position of the ASRS and addi‐ tions to/deductions from ASRS' fiduciary net position have REAL LONG-TERM TARGET RETURN EXPECTED been determined on the same basis as they are reported by ASSET ARITHMETIC REAL RAT ASRS. For this purpose, benefit payments (including re‐ ASSET CLASS ALLOCATION BASIS OF RETURN funds of employee contributions) are recognized when due Equity 63.00% 7.03% 4.43% and payable in accordance with the benefit terms. Invest‐ ments are reported at fair value. Fixed Income 25.00% 3.20% 0.80% Commodities 4.00% 4.50% 0.18% EMPLOYER CONTRIBUTIONS Real estate 8.00% 4.75% 0.38% Contributions are recognized as revenues when due, pur‐ suant to statutory and contractual requirements. Total 100.00% 5.79% Inflation 3.00% ACTUARIAL ASSUMPTIONS Expected arithmetic nominal return 8.79% The total pension liability was determined by an actuarial valuation as of June 30, 2013, and rolled forward using generally accepted actuarial procedures to June 30, 2014: Actual returns may be lower due to volatility of returns. The actuarial assumptions related to funding were selected The long‐term expected rate of return of 8.79% differs from the 8% utilized to discount the net pension liability. Actuarial Valuation Date June 30, 2013 Details regarding the discount rate for actuarial purposes Actuarial Roll Forward Date June 30, 2014 follows.
Actuarial Cost Method Entry Age Normal DISCOUNT RATE Amortization Method: The discount rate used to measure the total pension liabil‐ Plan Amendments Immediate ity was 8%. The projection of cash flows used to determine the discount rate assumed that contributions from partici‐ Investment Gain/Loss 5 years pating employers will be made based on the actuarially Assumption Gain/Loss Avg. Future Serv. Lives determined rates based on the Boards’ funding policy, Experience Gain/Loss Avg. Future Serv. Lives which establishes the contractually required rate under Arizona statute. Asset Valuation Market Value
Discount Rate 8.00% Based on those assumptions, the Plan’s fiduciary net posi‐ Projected Salary Increase 3.00 - 6.75% tion was projected to be available to make all the projected Inflation 3.00% future benefit payments of current plan members. There‐ fore, the long‐term expected rate of return on pension plan Permanent Benefit Increase Included investments was applied to all periods of projected benefit Mortality Rates 1994 GAM Scale BB payments to determine the total pension liability.
SENSITIVITY OF THE NET PENSION LIABILITY TO on the basis of an experience study which was performed CHANGES IN THE DISCOUNT RATE for the five‐year period ending June 30, 2012. The table below presents the net pension liability of the participating employers calculated using the discount rate The long‐term expected rate of return on pension plan in‐ of 8%, as well as what the employers’ net pension liability vestments was determined using a building‐block method would be if it were calculated using the discount rate that in which best‐estimate ranges of expected future real rates is 1.00% lower (7.00%) or 1.00% higher (9.00%) than the of return (expected returns, net of pension plan invest‐ current rate at June 30, 2014 (in thousands): ment expense and inflation) are developed for each major
Comprehensive Annual Financial Report 77 FINANCIAL SECTION
COMBINED NOTES TO THE FINANCIAL STATEMENTS
CURRENT $423,785 reported as deferred outflows of resources to 1% DISCOUNT 1% pensions resulting from contribution subsequent to the DECREASE RATE INCREASE (7.00%) (8.00%) (9.00%) measurement date will be recognized as a reduction to the net pension liability in the year ended June 30, 2016. $ 7,376 $ 5,835 $ 5,000 Other amounts reported as collective deferred (inflows)/ outflows of resources to be recognized in pension expense: ADDITIONAL FINANCIAL AND ACTUARIAL INFORMATION The additional financial and actuarial information is avail‐ DEFERRED INFLOWS AND OUTFLOWS able at www.azasrs.gov. (INFLOW) FYE JUNE 30, OUTFLOW PENSION LIABILITIES, PENSION EXPENSE, AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED 2016 (174,118) INFLOWS OF RESOURCES RELATED TO PENSION 2017 (174,118) At June 30, 2015, the System recorded a liability of (230,812) $5,835,425 for the net pension liability. The net pension 2018 liability for the plan in total was measured as of June 30, 2019 (255,109) 2013 and determined by an actuarial valuation as of that 2020 - date with a roll‐forward to June 30, 2014. The System’s Thereafter - proportionate share of the total net pension liability was based on the ratio of the System’s actual contributions of TOTAL (834,157) $423,785 paid to ASRS for the year ended June 30, 2014 relative the actual contributions of $964,529,947 from all participating employers. At June 30, 2015 the System’s proportionate share was 0.039438% which is a decrease NOTE 16: RESTATEMENT of .000948% from the previous year. The implementation of GASB No. 68, Accounting and Finan‐ For the year ended June 30, 2015, the System recognized a cial Reporting for Pension, an amendment of GASB State‐ pension expense of $336,048, our proportionate share of ment No. 27 requires the System to account for the liability the total pension expense. related to pension benefits provided to employees of the System as a governmental employer. The result of this At June 30, 2015, the System reported deferred outflows of created a liability balance at the beginning of fiscal year resources and deferred inflows of resources from the fol‐ 2015 of $6,333,534. lowing sources related to ASRS pension benefits:
RECONCILIATION OF EMPLOYER CONTRIBUTIONS (IN THOUSANDS) RESOURCE RESOURCE BALANCE OF DEFERRED OUTFLOWS DEFERRED DEFERRED AND INFLOWS DUE TO: OUTLOWS INFLOWS
Differences between expected 296,573 and Actual Experience Changes of assumptions Changes in proportion and differences between employer contributions and proportionate share of contributions Differences Between Expected and
Actual Experience Net Difference Between Projected and Actual In- 1,020,436 vestment Earnings on Pension Plan Investments Changes of Assumptions Changes in Proportion and Differences Between Employer Contributions and Proportionate 110,294 Share of Contributions Employer contributions subsequent 423,785 to the measurement date
TOTAL 720,358 1,130,730
78 Comprehensive Annual Financial Report FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
PSPRS SCHEDULE OF FUNDING PROGRESS - HEALTH INSURANCE 3-YEAR SCHEDULE PSPRS (IN THOUSANDS) SCHEDULE OF EMPLOYER CONTRIBUTIONS HEALTH INSURANCE ACTUARIAL UNFUNDED UAAL AS A 3-YEAR SCHEDULE ACTUARIAL ACTUARIAL ACCRUED AAL PERCENTAGE VALUATION VALUE OF LIABILITY (AAL) (EXCESS) FUNDED COVERED OF COVERED FISCAL ANNUAL DATE ASSETS AT ENTRY AGE (UAAL) RATIO PAYROLL PAYROLL YEAR END REQUIRED PERCENTAGE JUNE 30, $ (A)* $ (B)* $ (B-A)* (A/B) $ (C) ((B-A)/C)) JUNE 30, CONT. CONTRIBUTED
2013 0 279,187 279,187 0.00% 1,370,609 20.37% 2013 21,625,733 100.00% 2014 294,431 286,514 (7,917) 102.80% 1,390,346 -0.57% 2014 20,676,943 100.00% 2015 315,354 294,410 (20,943) 107.10% 1,401,178 -1.49% 2015 22,600,769 100.00%
EORP SCHEDULE OF FUNDING PROGRESS - HEALTH INSURANCE 3-YEAR SCHEDULE EORP (IN THOUSANDS) SCHEDULE OF EMPLOYER CONTRIBUTIONS HEALTH INSURANCE ACTUARIAL UNFUNDED UAAL AS A 3-YEAR SCHEDULE ACTUARIAL ACTUARIAL ACCRUED AAL PERCENTAGE VALUATION VALUE OF LIABILITY (AAL) (EXCESS) FUNDED COVERED OF COVERED FISCAL ANNUAL DATE ASSETS AT ENTRY AGE (UAAL) RATIO PAYROLL PAYROLL YEAR END REQUIRED PERCENTAGE JUNE 30, $ (A)* $ (B)* $ (B-A)* (A/B) $ (C) ((B-A)/C)) JUNE 30, CONT. CONTRIBUTED
2013 0 11,646 11,646 0.00% 67,505 17.25% 2013 1,485,105 100.00% 2014 23,113 12,112 (11,001) 190.83% 68,341 -16.10% 2014 0 0.00% 2015 23,044 12,361 (10,683) 186.42% 61,933 -17.25% 2015 0 0.00%
CORP SCHEDULE OF FUNDING PROGRESS - HEALTH INSURANCE 3-YEAR SCHEDULE CORP (IN THOUSANDS) SCHEDULE OF EMPLOYER CONTRIBUTIONS HEALTH INSURANCE ACTUARIAL UNFUNDED UAAL AS A 3-YEAR SCHEDULE ACTUARIAL ACTUARIAL ACCRUED AAL PERCENTAGE VALUATION VALUE OF LIABILITY (AAL) (EXCESS) FUNDED COVERED OF COVERED FISCAL ANNUAL DATE ASSETS AT ENTRY AGE (UAAL) RATIO PAYROLL PAYROLL YEAR END REQUIRED PERCENTAGE JUNE 30, $ (A)* $ (B)* $ (B-A)* (A/B) $ (C) ((B-A)/C)) JUNE 30, CONT. CONTRIBUTED
2013 0 77,093 77,093 0.00% 503,359 15.50% 2013 6,830,919 100.00% 2014 95,740 80,168 (15,573) 119.42% 514,536 -3.03% 2014 6,576,531 100.00% 2015 103,582 83,823 (19,759) 123.57% 505,905 -3.91% 2015 7,158,835 100.00%
CORP-AOC SCHEDULE OF FUNDING PROGRESS - HEALTH INSURANCE 3-YEAR SCHEDULE CORP-AOC (IN THOUSANDS) SCHEDULE OF EMPLOYER CONTRIBUTIONS HEALTH INSURANCE ACTUARIAL UNFUNDED UAAL AS A 3-YEAR SCHEDULE ACTUARIAL ACTUARIAL ACCRUED AAL PERCENTAGE VALUATION VALUE OF LIABILITY (AAL) (EXCESS) FUNDED COVERED OF COVERED FISCAL ANNUAL DATE ASSETS AT ENTRY AGE (UAAL) RATIO PAYROLL PAYROLL YEAR END REQUIRED PERCENTAGE JUNE 30, $ (A)* $ (B)* $ (B-A)* (A/B) $ (C) ((B-A)/C)) JUNE 30, CONT. CONTRIBUTED
2013 0 16,451 16,451 0.00% 100,709 16.34% 2013 1,363,709 100.00% 2014 6,359 16,847 10,488 37.75% 110,728 9.47% 2014 1,017,989 100.00% 2015 7,764 17,048 9,284 45.54% 110,363 9.25% 2015 954,946 100.00%
Comprehensive Annual Financial Report 79 FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
EORP SCHEDULE OF PENSION CONTRIBUTIONS LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY FROM 2014)
CONTRIBUTION FISCAL ACTUARIALLY CONTRIBUTION CONTRACTUALLY AS A % OF YEAR END DETERMINED ACTUAL DEFICIENCY REQUIRED COVERED COVERED JUNE 30, CONTRIBUTION CONTRIBUTION (EXCESS) CONTRIBUTIONS PAYROLL PAYROLL
2014 $28,235,016 $29,845,174 ($1,610,158) 16,060,110 $68,340,894 43.67% 2015 $37,323,403 $29,324,054 $7,999,349 14,554,345 $61,933,383 47.35%
CORP-AOC SCHEDULE OF PENSION CONTRIBUTIONS LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY FROM 2014)
FISCAL ACTUARIALLY CONTRIBUTION CONTRIBUTION YEAR END DETERMINED ACTUAL DEFICIENCY COVERED AS A % OF JUNE 30, CONTRIBUTION CONTRIBUTION (EXCESS) PAYROLL COVERED PAYROLL
2014 15,930,155 15,551,633 378,522 110,728,017 14.04% 2015 16,364,512 16,560,621 (196,109) 110,362,697 15.01%
ASRS SCHEDULE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND RELATED RATIOS LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY FROM 2015)
NET PENSION FIDUCIARY PERCENTAGE SHARE OF LIABILITY (ASSET) NET POSITION FISCAL OF THE NET THE NET AS A % OF AS A % OF YEAR END PENSION LIABILITY PENSION LIABILITY COVERED COVERED TOTAL PENSION JUNE 30, (ASSET) (ASSET) PAYROLL PAYROLL LIABILITY
2015 0.039438% 5,835 3,452 169.05% 69.49%
SCHEDULE OF INVESTMENT RETURNS - MONEY WEIGHTED RATE OF RETURN ALL PLANS COMBINED LAST TEN FISCAL YEARS
25.00%
18.54% 20.00% 17.70%
15.00% 13.30% 12.89% 11.53%
10.00% 8.21%
5.00% 3.98%
0.00%
-2.32% -5.00%
-10.00% -8.70%
-15.00%
-20.00% -18.42%
-25.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
80 Comprehensive Annual Financial Report FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
EORP SCHEDULE OF EMPLOYER’S NET PENSION LIABILITY LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY FROM 2014)
PLAN NET NET PENSION FISCAL TOTAL NET POSITION AS A LIABILITY AS A YEAR END PENSION PLAN PENSION % OF TOTAL COVERED % OF COVERED JUNE 30, LIABILITY NET POSITION LIABILITY PENSION LIABILITY PAYROLL PAYROLL
2014 984,876,274 314,304,310 670,571,964 31.91% 68,340,894 981.22% 2015 1,090,119,723 308,668,424 781,451,299 28.32% 61,933,383 1261.76%
CORP-AOC SCHEDULE OF EMPLOYER’S NET PENSION LIABILITY LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY FROM 2014)
PLAN NET NET PENSION FISCAL TOTAL NET POSITION AS A LIABILITY AS A YEAR END PENSION PLAN PENSION % OF TOTAL COVERED % OF COVERED JUNE 30, LIABILITY NET POSITION LIABILITY PENSION LIABILITY PAYROLL PAYROLL
2014 541,912,095 317,519,007 224,393,088 58.59% 110,728,017 202.65% 2015 577,419,466 334,292,749 243,126,717 57.89% 110,362,697 220.30%
Comprehensive Annual Financial Report 81 FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
EORP SCHEDULE OF CHANGES IN EMPLOYER’S NET PENSION LIABILITY AND RELATED RATIOS LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY)
FISCAL YEAR ENDING JUNE 30, 2015 2014
TOTAL PENSION LIABILITY Service Cost 23,501,879 23,501,879 Interest on Total Pension Liability 54,960,104 47,537,398 Benefit Changes 95,710,915 342,442,071 Expected-Actual Experience of Total Pension Liability (14,303,022) 4,643,397 Benefit Payments and Refunds (54,626,427) (54,138,971)
Net Change in Total Pension Liability 105,243,449 363,985,774
Beginning Total Pension Liability 984,876,274 620,890,500
Ending Total Pension Liability (A) 1,090,119,723 984,876,274
PLAN FIDUCIARY NET POSITION Employer Contributions 24,324,054 24,845,174 Employee Contributions 9,113,788 8,989,478 Non-Employer Contributions 5,000,000 5,000,000 Pension Plan Net Investment Income 6,358,800 34,068,988 Benefit Payments and Refunds (54,626,427) (54,138,971) Pension Plan Administrative Expense (297,535) (315,896) Other 4,491,434 3,327,220
Net Changes in Plan Fiduciary Net Position (5,635,886) 21,775,993
Beginning Plan Fiduciary Net Position 314,304,310 292,528,317
Ending Plan Fiduciary Net Position (B) 308,668,424 314,304,310
Net Pension Liability (A-B) 781,451,299 670,571,964
Plan Fiduciary Net Position as % of Total Pension Liability 28.32% 31.91%
Covered Employee Payroll 61,933,383 68,340,894
Net Position Liability as % of Covered Employee Payroll 1261.76% 981.22%
82 Comprehensive Annual Financial Report FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
CORP-AOC SCHEDULE OF CHANGES IN EMPLOYER’S NET PENSION LIABILITY AND RELATED RATIOS LAST 10 FISCAL YEARS (BUILT PROSPECTIVELY)
FISCAL YEAR ENDING JUNE 30, 2015 2014
TOTAL PENSION LIABILITY Service Cost 15,617,822 16,955,738 Interest on Total Pension Liability 42,338,170 35,423,999 Benefit Changes 0 45,420,437 Expected-Actual Experience of Total Pension Liability (1,686,095) 9,870,077 Benefit Payments and Refunds (20,762,526) (17,082,841)
Net Change in Total Pension Liability 35,507,371 90,587,410
Beginning Total Pension Liability 541,912,095 451,324,685
Ending Total Pension Liability (A) 577,419,466 541,912,095
PLAN FIDUCIARY NET POSITION Employer Contributions 16,560,621 15,551,633 Employee Contributions 9,614,012 9,132,189 Pension Plan Net Investment Income 6,924,061 36,147,891 Benefit Payments and Refunds (20,762,526) (17,082,841) Pension Plan Administrative Expense (306,036) (304,890) Other 4,743,540 (4,624,871)
Net Changes in Plan Fiduciary Net Position 16,773,672 38,819,111
Beginning Plan Fiduciary Net Position 317,519,077 278,699,966
Ending Plan Fiduciary Net Position (B) 334,292,749 317,519,077
Net Pension Liability (A-B) 243,126,717 224,393,018
Plan Fiduciary Net Position as % of Total Pension Liability 57.89 % 58.59 %
Covered Employee Payroll 110,362,697 110,728,017
Net Position Liability as % of Covered Employee Payroll 220.30 % 202.65 %
Comprehensive Annual Financial Report 83 FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
NOTE 1: SUMMARY OF ACTUARIAL METHODS AND NOTE 2: FACTORS THAT AFFECT TRENDS ASSUMPTIONS USED TO DETERMINE RECOMMENDED CONTRIBUTION AMOUNTS For any plan presented in the schedules disclose informa‐ tion about the factors that significantly affect trends in the EORP amounts reported including, for example, changes in bene‐ fit provisions, changes in the size or composition of the ACTUARIAL METHODS AND ASSUMPTIONS USED TO population covered by the benefit terms, or the use of dif‐ DETERMINE RECOMMENDED CONTRIBUTION AMOUNTS ferent assumptions. The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional in‐ formation as of the latest actuarial valuation follows:
PENSION Valuation date June 30, 2015 Actuarial cost method: Entry Age Normal. Amortization method: Level dollar, closed. Remaining amortization period: 21 years Asset valuation method: 7‐year smoothed market 80%/120% market.
Actuarial assumptions: Investment Rate of Return: 7.85% Projected Salary Increases: 4.25% Payroll Growth: 4.00% Cost of Living Adjustments: None.
CORP‐AOC
ACTUARIAL METHODS AND ASSUMPTIONS USED TO DETERMINE RECOMMENDED CONTRIBUTION AMOUNTS The information presented in the required supplementary schedules was determined as part of the actuarial valua‐ tions at the dates indicated. Additional information as of the latest actuarial valuation follows:
PENSION Valuation date: June 30, 2015 Actuarial cost method: Entry Age Normal Amortization method: Level percent of pay, closed Remaining amortization period: 21 years for underfunded, 20 years for overfunded Asset valuation method: 7‐year smoothed market 80%/120% market corridor Inflation: 4%; No explicit price inflation assumption is used in this evaluation.
Actuarial assumptions: Investment Rate of Return: 7.85% Projected Salary Increases: 4.00% ‐ 7.25% Payroll Growth: 4.00% Cost of Living Adjustments: None
84 Comprehensive Annual Financial Report FINANCIAL SECTION
SUPPORTING SCHEDULES INFORMATION
SCHEDULE OF CHANGES IN RESERVE BALANCES FOR THE YEARS ENDED JUNE 30, 2015 AND 2014 (IN THOUSANDS)
PSPRS EORP FUTURE FUTURE BENEFIT BENEFIT EE ER HI INCREASE EE ER HI INCREASE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE
BALANCE AS OF JUNE 30, 2013 1,154,573 4,123,296 251,188 0 48,357 238,217 19,989 4,371
DISTRIBUTION OF REVENUES AND EXPENSES
Members' Contributions 141,066 0 0 0 8,938 0 0 0
Employers' Contributions 0 413,846 19,534 0 0 24,845 1,072 0
Non-Employer Contributions 0 0 0 0 0 5,000 0 0 Earnings (Loss) on Investments 0 723,428 33,753 0 0 38,905 2,663 0 Net of Investment Expenses
Pension and Insurance Benefits 0 (612,105) (13,578) 0 0 (53,984) (951) 0
Refunds to Terminated Members (8,873) (5,562) 0 0 (141) (14) 0 0
Administrative Expenses 0 (5,826) 0 0 0 (316) 0 0
DISTRIBUTION OF TRANSFERS Excess Investment Earnings to be 0 0 0 0 0 (18,109) 0 18,109 used for Future Benefit Increases
Earnings (Loss) on Excess Investment 0 0 0 0 0 15,752 0 (15,752) Earnings Account Assets
Amount Utilized by Benefit 0 0 0 0 0 0 0 0 Increases Granted
Net Transfers In (Out) and Purchase 11,418 264 0 0 124 2 0 0 of Service Credits
Balances Transferred to Employers' (49,245) 49,245 0 0 (3,267) 3,267 0 0 Reserve due to Retirement
BALANCE AS OF JUNE 30, 2014 1,248,939 4,686,585 290,897 0 54,011 253,566 22,773 6,728
DISTRIBUTION OF REVENUES AND EXPENSES
GASB 68 Prior Year Adjustment 0 (4,828) 0 0 0 (251) 0 0
Prior Year Reserve Adjustments 0 (22) 0 0 0 0 0 0
Members' Contributions 154,359 0 0 0 8,472 0 0 0
Employers' Contributions 0 448,098 21,481 0 0 24,324 0 0
Non-Employer Contributions 0 0 0 0 0 5,000 0 0 Earnings (Loss) on Investments 0 216,286 10,811 0 0 11,075 804 0 Net of Investment Expenses
Pension and Insurance Benefits 0 (665,138) (14,242) 0 0 (54,453) (957) 0
Refunds to Terminated Members (8,355) (5,543) 0 0 (172) (1) 0 0
Administrative Expenses 0 (5,387) (269) 0 0 (298) (22) 0
DISTRIBUTION OF TRANSFERS Excess Investment Earnings to be 0 0 0 0 0 0 0 0 used for Future Benefit Increases
Earnings (Loss) on Excess Investment 0 0 0 0 0 (248) 0 248 Earnings Account Assets
Amount Utilized by Benefit 0 0 0 0 0 6,975 0 (6,975) Increases Granted
Net Transfers In (Out) and Purchase 10,667 108 0 0 667 1 0 0 of Service Credits
Balances Transferred to Employers' (59,644) 59,644 0 0 (7,030) 7,030 0 0 Reserve due to Retirement
BALANCE AS OF JUNE 30, 2015 1,345,966 4,729,803 308,678 0 55,947 252,721 22,598 0
Comprehensive Annual Financial Report 85 FINANCIAL SECTION
SUPPORTING SCHEDULES INFORMATION
SCHEDULE OF CHANGES IN RESERVE BALANCES FOR THE YEARS ENDED JUNE 30, 2015 AND 2014 (IN THOUSANDS)
CORP CORP-AOC FUTURE FUTURE BENEFIT BENEFIT EE ER HI INCREASE EE ER HI INCREASE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE RESERVE
BALANCE AS OF JUNE 30, 2013 309,148 741,815 81,285 0 74,746 197,857 4,729 0
DISTRIBUTION OF REVENUES AND EXPENSES
Members' Contributions 42,697 0 0 0 9,039 0 0 0
Employers' Contributions 0 62,246 5,477 0 0 15,552 1,204 0
Non-Employer Contributions 0 0 0 0 0 0 0 0 Earnings (Loss) on Investments 0 145,433 10,977 0 0 37,419 687 0 Net of Investment Expenses
Pension and Insurance Benefits 0 (91,319) (2,728) 0 0 (15,768) (309) 0
Refunds to Terminated Members (18,649) (10,483) 0 0 (993) (321) 0 0
Administrative Expenses 0 (1,143) 0 0 0 (294) 0 0
DISTRIBUTION OF TRANSFERS Excess Investment Earnings to be 0 0 0 0 0 0 0 0 used for Future Benefit Increases
Earnings (Loss) on Excess Investment 0 0 0 0 0 0 0 0 Earnings Account Assets
Amount Utilized by Benefit 0 0 0 0 0 0 0 0 Increases Granted
Net Transfers In (Out) and Purchase 167 (186) 0 0 227 57 0 0 of Service Credits
Balances Transferred to Employers' (16,123) 16,123 0 0 (3,903) 3,903 0 0 Reserve due to Retirement
BALANCE AS OF JUNE 30, 2014 317,239 862,487 95,012 0 79,116 238,403 6,312 0
DISTRIBUTION OF REVENUES AND EXPENSES
GASB 68 Prior Year Adjustment 0 (986) 0 0 0 (269) 0 0
Prior Year Reserve Adjustments 0 0 0 0 0 0 0 0
Members' Contributions 42,817 0 0 0 9,303 0 0 0
Employers' Contributions 0 66,017 6,209 0 0 16,561 1,378 0
Non-Employer Contributions 0 0 0 0 0 0 0 0 Earnings (Loss) on Investments 0 43,281 3,563 0 0 11,804 251 0 Net of Investment Expenses
Pension and Insurance Benefits 0 (97,252) (3,074) 0 0 (19,131) (318) 0
Refunds to Terminated Members (17,165) (9,592) 0 0 (1,072) (560) 0 0
Administrative Expenses 0 (1,086) (89) 0 0 (293) (6) 0
DISTRIBUTION OF TRANSFERS Excess Investment Earnings to be 0 0 0 0 0 0 0 0 used for Future Benefit Increases
Earnings (Loss) on Excess Investment 0 0 0 0 0 0 0 0 Earnings Account Assets
Amount Utilized by Benefit 0 0 0 0 0 0 0 0 Increases Granted
Net Transfers In (Out) and Purchase 96 (297) 0 0 411 35 0 0 of Service Credits
Balances Transferred to Employers' (16,853) 16,853 0 0 (5,375) 5,375 0 0 Reserve due to Retirement
BALANCE AS OF JUNE 30, 2015 326,134 879,425 101,621 0 82,383 251,925 7,617 0
86 Comprehensive Annual Financial Report FINANCIAL SECTION
SUPPORTING SCHEDULES INFORMATION
SCHEDULE OF RECEIPTS AND DISBURSEMENTS COMBINED PLANS FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
2015 2014 RECEIPTS Members' Contributions 214,696,136 203,207,945 Employers' Contributions 542,801,425 508,637,935 Health Insurance Contributions 29,074,352 27,426,690 Non-Employers’ Contributions 5,000,000 5,000,000 Court Fees 8,284,032 8,544,991 Alternative Contributions 3,299,430 2,469,376 Legacy Contributions 607,432 17,519 Interest 5,887,520 9,646,831 Dividends 53,847,970 57,325,140 Other Income 62,443,144 72,994,203 Securities Lending Income 5,140,695 2,095,281 Transfer In 569,640 1,170,695 Service Purchase 11,865,440 11,473,763 Maturities and Sales of: U S Equity 1,364,794,935 952,785,899 NON-U S Equity 225,800,038 463,562,148 GTAA 87,273,056 145,000,000 Fixed Income 232,594,682 182,584,456 Absolute Return 50,339,610 12,791,820 Credit Opportunities 191,504,600 244,067,384 Private Equity 226,664,657 206,529,943 Real Assets 96,959,373 186,466,487 Real Estate 229,729,707 245,422,244 Risk Parity 103,865,329 183,363,313 Total Receipts 3,811,367,156 3,732,584,063 DISBURSEMENTS Pension Benefits 727,203,015 686,438,726 Refunds to Terminiated Members 42,459,965 45,036,355 Drop Benefits 108,770,862 86,736,929 Health Insurance Subsidy 18,590,895 17,566,289 Investment and Administrative Expenses 108,483,430 120,846,618 Transfer Out 747,113 572,748 Acquisitions of: U S Equity 1,162,187,767 988,872,802 NON-U S Equity 357,685,372 451,484,522 GTAA 110,000,000 77,273,738 Fixed Income 87,400,451 225,425,628 Absolute Return 52,860,131 20,648,368 Credit Opportunities 239,424,852 153,646,390 Private Equity 209,338,409 97,680,104 Real Assets 243,205,489 124,816,930 Real Estate 154,422,054 352,114,039 Risk Parity 145,415,500 74,241,636 Total Disbursements 3,768,195,305 3,523,401,823
INCREASE (DECREASE) IN CASH 43,171,851 209,182,240 BEGINNING CASH BALANCE - July 1 352,470,088 143,287,848 ENDING CASH BALANCE - June 30 395,641,939 352,470,088
Comprehensive Annual Financial Report 87 FINANCIAL SECTION
SUPPORTING SCHEDULES INFORMATION
SCHEDULE OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED JUNE 30, 2015
PSPRS EORP CORP EXPENSE CATEGORY ADMIN INVEST ADMIN INVEST ADMIN INVEST TOTAL
Accounting and Auditing Services 84,845 0 4,418 0 22,134 0 111,397 Actuarial Services 273,434 0 32,240 0 114,733 0 420,407 Building Expense 122,910 0 6,401 0 32,065 0 161,376 Communications 30,487 0 1,588 0 7,953 0 40,028 Computer Related Expense 108,472 123,520 5,706 6,433 28,379 32,224 304,733 Contractual Services 54,843 0 2,856 0 14,307 0 72,006 Depreciation Expense 195,360 0 19,595 0 35,266 0 250,221 Fund Manager Initiatives 344,482 0 17,939 0 89,868 0 452,289 Furniture and Equipment 784 0 25 0 204 0 1,013 Investment Services 0 98,235,297 0 5,117,908 0 25,509,223 128,862,428 Legal Services 596,160 725,172 40,118 37,765 155,525 189,181 1,743,921 Local Board Training 0 0 0 0 0 0 0 Payroll Taxes and Fringe Benefits 827,127 313,852 43,087 13,378 215,842 67,016 1,480,302 Postage Expenses 23,489 0 1,223 0 6,128 0 30,840 Printing and Publications 11,267 0 587 0 2,939 0 14,793 Professional Services 507,834 1,536,939 14,520 80,039 102,482 400,953 2,642,767 Salaries and Wages 2,406,671 800,467 125,331 44,652 627,847 223,685 4,228,653 Supplies and Services 26,490 0 1,380 0 6,911 0 34,781 Training Expenses 29,343 13,400 1,528 698 9,135 3,496 57,600 Travel Expense 11,661 23,811 607 1,240 1,562 6,212 45,093
TOTAL 5,655,659 101,772,458 319,149 5,302,111 1,473,280 26,431,989 140,954,647
88 Comprehensive Annual Financial Report FINANCIAL SECTION
SUPPORTING SCHEDULES INFORMATION
SCHEDULE OF CONSULTANT EXPENSES ALL PLANS FOR THE YEAR ENDED JUNE 30, 2015
CONSULTANT SERVICE PROVIDED FEES PAID
ALBOURNE AMERICA, LLC International Alternative Investment Consultant 573,914 AVANT STRATEGIES Public Relations Consultant 91,262 BNY MELLON ASSET SERVICING Independent Investment Advisor 374,918 COPPERSMITH BROCKELMAN Litigation Counsel 35,548 ERNST & YOUNG LLP Investment Consultant 188,273 FENNEMORE CRAIG, P.C. General Counsel 6,790 FOLEY & LARDNER, LLC Investment Counsel 123,524 FOSTER PEPPER Investment Counsel 33,396 GABRIEL ROEDER SMITH & COMPANY Actuary 487,628 GOODWIN PROCTER Legislative Liaison 18,635 HEINFELD, MEECH & CO. Independent Auditor 111,401 HIGHGROUND, INC Legislative Liaison 93,261 INNOVATIVE CREDIT SOLUTIONS Due Diligence 344 JACKSON WALKER LLP Investment Counsel 77,449 KUTAK ROCK LLP General Counsel 1,216,892 LEWIS AND ROCA, LLP HR Consultant 478 LIGHT STONE SOLUTIONS, LLC Due Diligence 251,403 MORRISON FOERSTER Investment Counsel 32,295 NEPC, LLC Independent Investment Advisor 321,332 OFFICE OF THE ATTORNEY GENERAL General Counsel 151,814 ORG PORTFOLIO MANAGEMENT LLC Real Estate Consultant 239,131 PILLSBURY Investment Counsel 14,260 PUBLIC POLICY PARTNERS Legislative Liaison 119,565 STEPSTONE GROUP LLC Equity Advisors 99,637 STEPTOE & JOHNSON, LLP Litigation Counsel 169,455 SUBROSA INVESTIGATIONS Due Diligence 87,160 WHETSTINE, CHARLES IRS Consultant 66,210
TOTAL 4,985,975
Comprehensive Annual Financial Report 89 FINANCIAL SECTION
THIS PAGE INTENTIONALLY BLANK
90 Comprehensive Annual Financial Report INVESTMENT SECTION INVESTMENT SECTION
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM Brian P. Tobin, Chairman CORRECTIONS OFFICER RETIREMENT PLAN Gregory Ferguson, Vice Chair ELECTED OFFICIALS' RETIREMENT PLAN Jeff McHenry, Trustee 3010 East Camelback Road, Suite 200 Richard J. Petrenka, Trustee Phoenix, Arizona 85016-4416 Randie A. Stein, Trustee www.psprs.com Administration Lauren W. Kingry, Trustee TELEPHONE: (602) 255-5575 Jared A. Smout Ryan Parham William C. Davis, Trustee FAX: (602) 255-5572 Administrator Chief Investment Officer
December 23, 2015
The Board of Trustees and The Administrator of the Arizona Public Safety Personnel Retirement System
Members:
As the Chief Investment Officer of the Public Safety Personnel Retirement System (PSPRS) during the fiscal year beginning July 1, 2014 and ending June 30, 2015, I submit the following comments and observations for your consideration and for the consideration of the respective parties in interest of the System:
INTRODUCTION On behalf of the PSPRS investment team, it is a pleasure to provide this annual update of investment activities of the PSPRS Trust for the fiscal year ending June 30, 2015. The end of fiscal year represents roughly five years since the portfo‐ lio was reconfigured to be much less risky and with much less dependence on just stock markets. I am happy to report that our gross return for the year was 4.21%. That was a better return than 80% of our peers (average return of 3.2%) and was achieved with less risk than 90 percent of our peer funds. This fiscal year return did not achieve our assumed earnings rate of 7.85% but the five year annualized returns for this newer portfolio are about 8.69% (net of fees) which nicely exceeds the assumed earnings rate. The portfolio is accomplishing its primary objectives and doing so with per‐ haps one fourth of the risk it was historically exposed to. The efficiency of the portfolio, that is how much return is gener‐ ated for the risk it takes, places us among the top 10% of funds like us in the nation. The Trust also exceeded its bench‐ mark returns by almost 98 basis points (which is about 26% more return than the benchmark in the year.)
ASSET ALLOCATION The assets of the Trust continue to be invested across ten global asset classes with the following asset allocation targets:
Public Equities 4% 10% Private Equity 13% 8% Fixed Income Opportunistic Credit 7% Absolute Return 11% GTAA Real Assets 11% 4% Real Estate 2% Risk Parity
Cash 30%
92 Comprehensive Annual Financial Report INVESTMENT SECTION
The benefits of this diversified approach can be seen by observing our Opportunistic Credit Portfolio vs. straight global bonds in this fiscal year. The Barclays global bond aggregate was down ‐7.09% (NOF). This is what a global bond investor would have lost. Our Opportunistic credit portfolio was up 4.82% (NOF) for the year. By diversifying away from straight core bonds, but still staying in credit investments, we were able to capture a spread of 11.91% to the benefit of the Trust.
MANAGEMENT FEES There has been an ongoing national discussion about fees paid to managers in the alternative asset classes like private equity. In this year our Private Equity portfolio returned (net of fees) 12.72%. This far outpaced lower fee exposures to U.S equities where the benchmark returned a little over 7% for the year. We tightly control fees in our legal negotiations arguing to have them reduced and/ or recouped in the respective investment vehicles. The decisions of staff in selecting managers and strategies and in tactical allocations added almost 1% to the return above the benchmark. That represents more than $80,000,000.00 (NOF). The system is achieving handsome results which exceed many times the fraction of a percent it pays in total fees for investment activities.
RISK ‐ PROTECTING ON THE DOWNSIDE In a continuation from previous years the portfolio risk over time against a pure stock index continues to show favorable results:
10.00%
9.00%
8.00% 7.00% 6.00%
5.00%
4.00% 3.00% 2.00%
1.00% Trailing Volatility (%/month) 0.00%
6/1/2003 6/1/2004 6/1/2005 6/1/2006 6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 12/1/2002 12/1/2003 12/1/2004 12/1/2005 12/1/2006 12/1/2007 12/1/2008 12/1/2009 12/1/2010 12/1/2011 12/1/2012 12/1/2013 12/1/2014 PSPRS Trust S&P 500 Stock Index
We continue to construct the portfolio to protect against the losses that have hurt us and other systems so deeply in the past. The current portfolio is significantly more resilient than it was historically as seen by its expected results against the actual results in extreme events:
Events Today's Portfolio PSPRS Trust Actual
Asian Crisis of 1997 3.20% 5.70%
Russian/LTCM Crisis 1998 -3.70% -5.50% WTC Attacks - Sept. 11 -3.20% -11.70%
Stock Market Crash 2002 -4.80% -21.10%
August Crisis 2007 1.30% 1.60% January Crisis 2008 -2.30% -2.70% Credit Crunch 2008 (Aug to Nov) -15.50% -23.10% Crisis 2009 (Jan-Feb) -7.70% -12.90% Flash Crash 2010 -3.60% -3.70%
Comprehensive Annual Financial Report 93 INVESTMENT SECTION
Protecting against losses in any given year protects our funding ratios and ensures that gains in future years are allocated to improvements in funding ratios instead of dedicated to undoing the previous year’s damage. Recall that a 20% loss in one year requires a 25% gain in the next year to simply break even. For us that would imply two years of zero gain while assets continued to diminish because of pension payrolls and two years of funding erosion against the return assumption of 7.85. Clearly protecting against losses should be and is a big part of our prudent management of the Trust.
CONCLUSION In an uncertain and volatile investment world and shaky global economies, the PSPRS team of staff, consultants and man‐ agers continues to produce consistent and improving results, ensuring that the Trust can and will achieve its long term objectives.
Respectfully Submitted,
Ryan P. Parham Chief Investment Officer
94 Comprehensive Annual Financial Report INVESTMENT SECTION
FUND INVESTMENT OBJECTIVES
The objective of the Fund is to ensure the integrity of the Consistent with the Fund objectives, the primary invest‐ Elected Officials’ Retirement Plan, Public Safety Personnel ment objective of the Fund is to maximize long‐term real Retirement Plan and the Corrections Officer Retirement (after inflation) investment returns recognizing estab‐ Plan in order to adequately fund benefit levels for mem‐ lished risk (volatility) parameters and the need to preserve bers as stated in Title 38, Chapter 5, Articles 3,4 and 6 of capital by: the Arizona Revised Statutes and as amended from time to Deriving a reasonable asset allocation model that at‐ time by the Legislature. To achieve the objective, the Fund tempts to fully achieve the primary investment objective, will do the following: over the long term. Maintain a goal for the Fund’s assets to be equal to the Consistent with these objectives and the direction of the Fund’s liabilities within a twenty year period. Board of Trustees, strategically allocating within asset Annually adjust the employer contribution rates based classes and investment styles in order to enhance invest‐ on the recommendations made by the annual actuarial ment returns. evaluations. Regularly reviewing the status of investments. Determine a reasonable contribution rate necessary to Regularly assessing the need to adjust the mix, type and fund benefits approved by the legislature and then re‐ composition of the investment classes within the alloca‐ duce the variation in the employer contribution rate tion ranges. over time to the Fund. Preserve and enhance the capital of the Fund through The possibility of short‐term declines in the market value effective management of the portfolio in order to take of the Fund or the Fund’s assets is a recognized conse‐ advantage of attractive opportunities various markets quence of achieving potentially higher long‐term invest‐ and market sectors have to offer. ment returns. Provide the opportunity for increased benefits for retir‐ ees as the legislature may from time to time enact The time horizon for evaluating total Fund investment per‐ through systematic growth of the investment fund. formance shall be long‐term.
ASSET ALLOCATION JUNE 30, 2015
3.76% 3.85% 15.61% U.S. Equity 9.93% Non-U.S. Equity Private Equity Fixed Income 7.99% Credit Opps 14.30% Absolute Return GTAA
Real Assets 9.73% Real Estate Risk Parity 14.38% Short Term 4.07%
8.78% 7.60%
Comprehensive Annual Financial Report 95 INVESTMENT SECTION
ANNUALIZED RATES OF RETURN* JUNE 30, 2015
Description TRUST TRUST TRUST TRUST 1 Year 3 Years 5 Years 10 Years
Arizona PSPRS Trust - Total Fund 3.68% 9.22% 8.69% 5.22% Target Fund Benchmark 2.70% 8.77% 9.22% 4.44%
Total Equity 1.17% 13.16% 12.06% 5.94% Target Equity Benchmark 1.36% 13.96% 13.20% 6.96%
U.S. Equity 6.32% 16.17% 15.34% N/A Russell 3000 7.29% 17.73% 17.54% 8.15%
Non-U.S. Equity -4.79% 9.52% 7.75% N/A MSCI ACWI Ex-US Net -5.26% 9.44% 7.76% 5.54%
Private Equity 12.72% 16.73% 16.28% N/A Russell 3000 + 100 bps 8.29% 18.74% 18.54% 10.29%
Fixed Income 2.19% 3.21% 4.03% 4.22% BC Global Aggregate -7.09% -0.81% 2.07% 3.54%
Credit Opportunities 4.82% 9.48% 9.26% N/A 50% BofA ML US High Yield BB-B, 50% CSFB Fixed Income 1.23% 5.89% 7.30% 5.66%
Absolute Return 4.86% 10.24% N/A N/A BofA ML 3-Month T-Bill + 200 bps 2.02% 2.06% 2.08% 3.42%
GTAA 6.28% 5.73% 8.18% N/A 3-Month LIBOR + 300 bps 3.25% 3.27% 3.31% 4.78%
Real Assets -4.24% 2.56% 2.99% N/A CPI + 200 bps 2.18% 3.34% 3.85% N/A
Real Estate 4.32% 4.32% 0.74% N/A NCREIF NPI * 12.98% 11.63% 12.72% 8.16%
Risk Parity 0.87% 2.98% N/A N/A 60% BC Global, 30% MSCI, 10% Bloomberg Index TR -6.55% 2.41% 4.52% 4.09%
Short Term Investments 0.02% 0.14% 0.00% 1.53% BofA ML 3-Month T-Bill 0.02% 0.06% 0.08% 1.42%
*Time weighted rate of return based on the market rate of return (net of fees).
Target Fund Benchmarks (Effective Dates) July 1, 2014 to Present: 16% Russell 3000, 14% MSCI World Ex-US Net, 11% Russell 3000 + 100 bps, 7% BC Global Aggregate, 13% Credit Opps, 4% BofA ML 3-Month T-Bill + 200 bps, 10% 3-Month LIBOR + 300 bps, 8% CPI + 200 bps, 11% NCREIF NPI, 4% Risk Parity and 2% BofA ML 3-Month T-Bill July 1, 2013 to June 30, 2014: 17% Russell 3000, 14% MSCI ACWI Ex-US Net, 10% Russell 3000 + 100 bps, 8% BC Global Aggregate, 12% Credit Opps, 4% BofA ML 3- Month T-Bill + 200 bps, 10% 3-Month LIBOR + 300 bps, 8% CPI + 200 bps, 11% NCREIF NPI, 4% Risk Parity and 2% BofA ML 3-Month T-Bill. July 1, 2012 to June 30, 2013: 18% Russell 3000, 14% MSCI World Ex-US Net, 9% Russell 3000 + 100 bps, 12% BC Global Aggregate, 12% Credit Opps, 4% BofA ML 3 -Month T-Bill + 200 bps, 8% 3-Month LIBOR + 300 bps, 7% CPI + 200 bps, 10% NCREIF NPI, 4% Risk Parity and 2% BofA ML 3-Month T-Bill. July 1, 2010 to June 30, 2012: 20% Russell 3000, 15% MSCI World Ex-US Net, 8% 3-Month LIBOR + 300 bps, 20% BC US Aggregate, 4% BofA ML 3-Month T-Bill + 200 bps, 9% BofA ML US High Yield BB-B Constrained, 8% Russell 3000 + 100 bps, 6% CPI + 200 bps, 8% NCREIF NPI and 2% BofA ML 3-Month T-Bill.
Target Equity Benchmarks (Effective Dates) July 1, 2014 to Present: 53.33% Russell 3000 and 46.67% MSCI World Ex-US Net July 1, 2013 to June 30, 2014: 54.84% Russell 3000 and 45.16% MSCI ACWI Ex-US Net. July 1, 2012 to June 30, 2013: 56.25% Russell 3000 and 43.75% MSCI ACWI Ex-US Net. July 1, 2010 to June 30, 2012: 57.14% Russell 3000 and 42.86% MSCI ACWI Ex-US Net.
96 Comprehensive Annual Financial Report INVESTMENT SECTION
TRUST EQUITY PORTFOLIO TOP 10 HOLDINGS TRUST FIXED INCOME PORTFOLIO TOP 10 HOLDINGS JUNE 30, 2015 JUNE 30, 2015
Description Shares Market Value Description Shares Market Value
STATE STREET INTL EQ 141,946,648 818,406,374 BGI CORE ACTIVE BOND FUND 7,888,777 196,569,902 STATE STREET US EQTY 10,340,937 519,195,778 IGUAZU PARTNERS LP 85,081,108 85,081,109 CRESTLINE ALPHA 176,548,881 176,548,880 FIELD STREET FUND 76,572,220 76,572,220 ACADIAN US MANAGED 3,260,405 153,622,803 BLACKROCK FIXED INCOME GLOBAL 74,072,183 74,072,184 SEG BAXTER STREET 111,447,826 111,447,826 GOLDENTREE HIGH YIELD VALUE 64,272,400 64,272,400 SOUTHPOINT 83,563,894 83,563,894 CAPITAL GUARDIAN EMERGING 2,472,071 34,930,357 ESG CBE 72,879,981 72,879,981 FRANKLIN TEMPLETON EMD 11,835,827 11,835,827 GOTHAM VALUE 1000 1,746,450 62,910,756 SKYWAY CONCESSION CO LLC 144A 13,000,000 10,790,000 GOTHAM INSTL SELECT 1,825,796 62,428,441 FHLMC MULTICLASS MTG 4012 MW 6,485,776 6,850,406 BLKRK FRONTIER FUND 7,369,599 55,347,776 HSBC FINANCE CORP 6,500,000 6,489,405
TRUST SUMMARY OF CHANGES IN INVESTMENT PORTFOLIO JUNE 30, 2015 (IN THOUSANDS)
JUNE 30, 2014 BALANCE JUNE 30, 2015 BALANCE PERCENT AT PERCENT AT MARKET MARKET BOOK MATURED MARKET BOOK MARKET DESCRIPTION VALUE VALUE VALUE ACQUIRED AND SOLD VALUE VALUE VALUE
U. S. Equity 17.46% 1,374,140 1,066,165 1,172,272 1,243,126 1,246,279 995,311 15.69% Non U. S. Equity 14.54% 1,144,349 952,848 355,332 240,303 1,180,912 1,067,877 14.85% GTAA 9.42% 741,514 579,086 110,000 86,667 811,613 602,419 10.22% Fixed Income 9.75% 767,483 676,228 87,400 194,320 632,443 569,308 7.96% Absolute Return 4.04% 318,149 228,528 52,860 47,851 339,244 233,537 9.21% Credit Opportunities 9.27% 729,584 705,912 239,425 141,578 731,816 803,759 15.07% Private Equity 13.75% 1,081,813 826,097 209,338 107,854 1,197,508 927,581 8.38% Real Assets 7.07% 556,137 487,068 243,205 87,936 665,575 642,337 10.42% Real Estate 11.10% 873,821 924,805 154,422 155,173 827,525 924,054 4.27% Risk Parity 3.60% 282,927 260,401 135,114 100,819 311,837 294,696 3.93%
TOTAL PORTFOLIO 100.00% 7,869,917 6,707,138 2,759,368 2,405,627 7,944,752 7,060,879 100.00%
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SCHEDULE OF COMMISSIONS PAID TO BROKERS SCHEDULE OF COMMISSIONS PAID TO BROKERS (cont) YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
SHARES AVG TOTAL SHARES AVG TOTAL BROKER TRADED COMM COMM BROKER TRADED COMM COMM
ABEL NOSER CORP, NEW YORK 949,987 0.0102 9,648 CREDIT SUISSE, TAIPEI 256,000 0.0013 326 ABG SECS, OSLO 15,202 0.0325 495 DAVIDSON(D A) & CO INC, NY 2,090 0.0350 73 AQUA SECURITIES LP, NEW YORK 79 0.0200 2 DEUTSCHE BK INTL EQ, UK 375,583 0.0037 1,396 AVONDALE PARTNERS LLC, NASH 6,223 0.0500 311 DEUTSCHE BK SEC INC, NY 7,600,000 0.0001 529 B.RILEY & CO.,LLC, LOS ANGELES 57,190 0.0133 759 DEUTSCHE BK SECS INC, NY 3,796,412 0.0014 5,167 BAIRD, ROBERT W & CO, MILW 346,150 0.0328 11,366 DEUTSCHE SEC ASIA LTD, TAIPEI 35,000 0.0035 122 BANCO BTG PACTUAL SA, RIO 77,400 0.0136 1,053 DOMINICK & DOMINICK, NJ 171 0.0350 6 BANCO SANTANDER, NEW YORK 157,316 0.0019 303 DOUGHERTY COMPANY, BKLN 291,378 0.0302 8,805 BANQUE PARIBAS, PARIS 1,955 0.0554 108 ERSTE BK BEFEKTETESI RT 6,240 0.0152 95 BARCLAYS BK PLC, NEW YORK 198,400 0.0175 3,471 FIDELITY CLEARING CANADA ULC 30 0.0090 0 BARCLAYS CAPITAL INC./LE, NJ 10,100 0.0090 91 FIG PARTNERS LLC, ATLANTA 180,291 0.0339 6,111 BARCLAYS CAPITAL LE, JERSEY 5,471 0.0233 127 FIRST ANALYSIS SECS CORP 11,011 0.0500 551 BB&T SECURITIES, LLC, RICH 31,015 0.0307 954 GLOBAL HUNTER SEC. LLC, NO 1,420 0.0350 50 BENCHMARK COMPANY, NY 832 0.0100 8 GOLDEN DIVIDEND 531 70,598 0.0042 295 BERNSTEIN SANFORD C & CO, NY 231,541 0.0200 4,631 GOLDMAN SACHS & CO, NY 2,631,295 0.0173 45,524 BLOOMBERG TRADEBOOK, NY 604,441 0.0200 12,089 GOLDMAN SACHS EXECUTION 91,868 0.0214 1,969 BLOOMBERG TRADEBOOK, NY 334 0.0200 7 GOLDMAN SACHS INTL, UK 953,558 0.0058 5,518 BMO CAPITAL MARKETS, NY 38,968 0.0249 971 GUGGENHEIM CAPITAL MKT, NJ 13,626 0.0467 637 BNP PARIBAS PRIME, NY 101,325 0.0098 996 HONG KONG & SHANGHAI BKG 82,136 0.0016 133 BNY CONVERGEX EX SOL, NY 45,400 0.0037 169 HONG KONG & SHANGHAI BKG HK 220,000 0.0002 49 BNY CONVERGEX, NEW YORK 2,560 0.0250 64 HSBC BANK AUSTRALIA LTD 785,941 0.0020 1,535 BREAN CAPITAL LLC, JERSEY 59,445 0.0255 1,517 HSBC BANK PLC, UK 220,265 0.0032 697 BTIG LLC, SAN FRANCISCO 673,417 0.0164 11,074 HSBC SECS INC, NEW YORK 420,601 0.0119 5,001 CANACCORD GENUITY NY 570,193 0.0125 7,126 INSTINET CORP, NY 204,279 0.0153 3,117 CANTOR CLEARING SERV, NY 500 0.0135 7 INSTINET EUROPE LIMITED, UK 5,796,421 0.0018 10,480 CANTOR CLEARING SERVICE, NY 762 0.0200 15 INVESTEC SECURITIES, UK 345,582 0.0087 3,003 CANTOR FITZGERALD & CO, NY 781,384 0.0150 11,742 INVESTMENT TECH, DUBLIN 271,033 0.0038 1,024 CAPITAL ONE SOUTHCOAST, NO 2,933 0.0496 145 INVESTMENT TECH, NEW YORK 181,973 0.0101 1,842 CITIGROUP GBL MKTS AUSTRALIA 124,077 0.0007 92 ISI GROUP INC, NY 2,935,802 0.0102 29,825 CITIGROUP GBL MKTS INC, NY 104,379 0.0200 2,088 ITG AUSTRALIA LTD, MELBOURNE 820 0.1325 109 CITIGROUP GBL MKTS/SAL, NY 47,294 0.0066 312 ITG CANADA CORP, TORONTO 70,000 0.0101 706 CITIGROUP GLOBAL MARKETS UK 45,161 0.0105 476 ITG HONG KONG LIMITED, HK 1,501,299 0.0010 1,525 CJS SECURITIES INC, JERSEY 11,250 0.0300 338 ITG INC, NY 696,018 0.0111 7,691 COMPASS POINT, JERSEY CITY 219,906 0.0329 7,242 J P MORGAN SEC, SYDNEY 4,632 0.0115 53 COWEN AND COMPANY, NY 222,659 0.0295 6,558 J P MORGAN SECS LTD, LONDON 323,792 0.0291 9,410 CRAIG HALLUM, MINNEAPOLIS 411,350 0.0267 10,985 J P MORGAN SECURITIES, BKLN 1,260,540 0.0028 3,543 CREDIT LYONNAIS SEC, SEOUL 1,200 0.0169 20 J.P. MORGAN CLEARING, NY 111,814 0.0216 2,420 CREDIT LYONNAIS SECS, SING 20,370 0.1169 2,382 JANNEY MONTGOMERY SCOTT 283,786 0.0101 2,868 CREDIT RESEARCH & TRADING 92,448 0.0311 2,874 JEFFERIES & CO INC, NEW YORK 400,573 0.0237 9,505 CREDIT SUISSE (EUROPE), UK 237,649 0.0018 419 JMP SECURITIES, SAN FRAN 9,370 0.0323 302 CREDIT SUISSE, NEW YORK 865,071 0.0071 6,150 JOHNSON RICE & CO, NO 21,945 0.0362 794 CREDIT SUISSE, SAO PAULO 12,300 0.0120 147 JONESTRADING INSTL SVCS LLC 648,252 0.0154 9,972
98 Comprehensive Annual Financial Report INVESTMENT SECTION
SCHEDULE OF COMMISSIONS PAID TO BROKERS (cont) SCHEDULE OF COMMISSIONS PAID TO BROKERS (cont) YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
SHARES AVG TOTAL SHARES AVG TOTAL BROKER TRADED COMM COMM BROKER TRADED COMM COMM
JP MORGAN SECS LTD 1,395 0.0235 33 PACIFIC CREST SECURITIES, POR 14,100 0.0350 494 JP MORGAN SECS ASIA PACIFIC 1,025,000 0.0016 1,595 PERSHING LLC, JERSEY CITY 57,560 0.0278 1,598 JPMORGAN SECURITIES INC, NY 127,000 0.0018 224 PERSHING SECURITIES LTD, UK 494,325 0.0106 5,226 KEEFE BRUYETTE AND WOODS 109,633 0.0352 3,860 PIPER JAFFRAY & CO, MN 70,958 0.0309 2,192 KEYBANC CAPITAL MARKETS, NJ 365,038 0.0331 12,070 RAFFERTY CAPITAL MARKETS, NJ 48,109 0.0302 1,454 KEYBANC CAPITAL MARKETS INC 80,453 0.0319 2,570 RAYMOND JAMES & ASSOC INC 143,745 0.0271 3,897 KING (CL) & ASSOCIATES 12,382 0.0337 417 RBC CAPITAL MARKETS LLC, NY 1,135,207 0.0057 6,470 KNIGHT CLEARING SERVICES LLC 16,790 0.0088 147 ROTH CAPITAL PARTNERS LLC 22,282 0.0294 656 KNIGHT EQUITY MARKETS LP 1,489,866 0.0166 24,779 SANDLER O'NEILL & PARTNERS 407,471 0.0272 11,093 LADENBURG THALMAN & CO 4,880 0.0350 171 SANFORD C BERNSTEIN & CO INC 30,128 0.0002 6 LEERINK SWANN & CO 5,750 0.0270 155 SANFORD C. BERNSTEIN & CO 129,216 0.0178 2,305 LIQUIDNET INC, BROOKLYN 347,509 0.0165 5,724 SCOTIA CAPITAL (USA) INC 9,419 0.0325 306 MACQUARIE BANK LIMITED 398,710 0.0025 993 SEAPORT GROUP SECS LLC 4,080 0.0350 143 MACQUARIE BANK LTD, HK 2,127,101 0.0006 1,257 SG SEC (LONDON) LTD, LONDON 4,834 0.0070 34 MACQUARIE CAPITAL LTD, UK 966,599 0.0039 3,797 SIDOTI & CO LLC, NEW YORK 74,186 0.0331 2,454 MACQUARIE SECURITIES, HK 58,730 0.0066 385 SIS SEGAINTERSETTLE AG 26,363 0.1526 4,024 MACQUARIE SECURITIES LTD 1,152 0.1094 126 STATE STREET BROKERAGE 3,164,769 0.0291 92,180 SVCS, BOSTON MACQUARIE SECURITIES(USA) 8,205 0.0100 82 STATE STREET GLOBAL MARKETS 7,931 0.0261 207 MAINFIRST BANK AG,FRANKFURT 30,700 0.0731 2,245 STEPHENS INC, LITTLE ROCK 306,685 0.0340 10,419 MERIDIAN EQUITY PARTNERS, NY 242,873 0.0150 3,644 STERNE AGEE & LEACH INC 34,442 0.0306 1,053 MERRILL LYNCH GILTS LTD, UK 58,450 0.0085 499 STIFEL NICOLAUS 874,220 0.0093 8,112 MERRILL LYNCH INTL (KSI), UK 151,291 0.0256 3,873 SUNTRUST CAPITAL MARKETS 82,371 0.0275 2,269 MERRILL LYNCH INTL UK 2,495,835 0.0059 14,793 UBS SECURITIES CANADA 104,300 0.0114 1,186 MERRILL LYNCH INTL LTD (IPB) 176,254 0.0047 826 UBS SECURITIES LLC, STAMFORD 970,706 0.0140 13,594 MERRILL LYNCH PFS, NY 1,018,614 0.0137 13,963 UBS WARBURG ASIA LTD 788,300 0.0008 669 MERRILL LYNCH PFS, WILM 90,526 0.0132 1,197 UBS WARBURG AUSTRALIA EQ 48,780 0.0024 117 MIZUHO SECURITIES USA, NY 6,839 0.0227 155 UBS WARBURG SEC,TAIWAN 95,000 0.0041 388 MKM PARTNERS LLC 238,632 0.0155 3,709 UBS WARBURG, LONDON 187,998 0.0028 533 MORGAN STANLEY & CO INC 189,980 0.0020 380 WEDBUSH MORGAN SECS INC 34,309 0.0361 1,238 MORGAN STANLEY & CO INC, NY 56,712,560 0.0024 137,399 WEEDEN & CO, NEW YORK 990,840 0.0237 23,509 MORGAN STANLEY & CO INTL LTD 40,811 0.0553 2,255 WELLS FARGO SECURITIES LLC 104,117 0.0110 1,145 MORGAN STANLEY & CO TAPEI 214,000 0.0000 8 WILLIAM BLAIR & CO, CHICAGO 58,129 0.0341 1,981 MORGAN STANLEY SEC, UK 47,163 0.0008 38 WILLIAMS CAPITAL GROUP LP 2,260 0.0198 45 MS SECS SVCS INC INTL, BKLN 79,430 0.0128 1,015 WM SMITH & CO, JERSEY 22,560 0.0300 677 NATIONAL FINL SVCS CORP, NY 33,063 0.0215 709 WUNDERLICH SECURITIES INC 42,574 0.0285 1,212 NEEDHAM & CO, NEW YORK 378,954 0.0258 9,760 TOTAL COMMISSIONS 121,103,077 0.0064 779,018 NEWEDGE USA LLC, NEW YORK 226 9.7896 2,212 NOBLE INTL INVESTMENTS, NJ 7,420 0.0300 223 NORTHLAND SECS INC, NJ 240,683 0.0241 5,803 NUMIS SECURITIES INC., NY 195,070 0.0153 2,988 ODDO ET CIE, PARIS 6,906 0.1421 982 OPPENHEIMER & CO INC, NY 209,248 0.0333 6,965
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U.S. EQUITY PORTFOLIO YEAR ENDED JUNE 30, 2015
UNREALIZED DESCRIPTION SHARES COST FAIR VALUE GAIN (LOSS)
ACADIAN US MANAGED 3,260,405 131,272,046 153,622,803 22,350,757 AZ GDH 115-65 103,088 8,207,346 7,790,003 (417,343) AZ GDH 140-40 480,816 18,826,230 17,889,022 (937,208) AZ GHVS 115-65 162,621 8,533,783 8,185,089 (348,694) AZ GHVS 140-40 452,553 19,878,776 19,341,598 (537,178) CRESTLINE ALPHA 176,548,881 150,000,000 176,548,880 26,548,880 EAGLE SMALL CAP ST 1,106,510 32,739,953 44,251,934 11,511,981 FRONTPOINT ALPHA 694,933 797,804 694,933 (102,871) GOTHAM INSTL SELECT 1,825,796 65,109,593 62,428,441 (2,681,152) GOTHAM VALUE 1000 1,746,450 63,586,345 62,910,756 (675,589) GOTHAM VALUE 2000 743,900 13,928,268 13,793,679 (134,589) RANGER SMALL CAP 621,271 19,588,523 25,121,513 5,532,990 RUSSELL 1000 MINI FUTURE (NYF) 1,489 0 (1,474,110) (1,474,110) RUSSELL 2000 MINI IND FUT NYF 118 0 (85,963) (85,963) SOUTHPOINT 83,563,894 60,000,000 83,563,894 23,563,894 STATE STREET US EQTY 10,340,937 351,432,368 519,195,778 167,763,410 THB MICRO CAP 2,195,560 30,932,670 31,549,001 616,331 THB SMALL CAP VAL 478,374 17,406,726 17,840,295 433,569 US EQUITY FUNDS 344,057 3,070,506 3,111,565 41,059
TOTAL U.S. EQUITY PORT 284,671,653 995,310,937 1,246,279,111 250,968,174
NON U.S. EQUITY PORTFOLIO YEAR ENDED JUNE 30, 2015
UNREALIZED DESCRIPTION SHARES COST FAIR VALUE GAIN (LOSS)
BLKRK FRONTIER FUND 7,369,599 35,001,972 55,347,776 20,345,804 ESG CBE 72,879,981 75,000,000 72,879,981 (2,120,019) GOTHAM 400 INTL 7,457,592 40,221,106 39,019,366 (1,201,740) GOTHAM INSTL INTL 4,823,233 38,397,787 39,355,591 957,804 INTL EQUITY FUNDS 823,550 45,536,358 44,455,229 (1,081,129) SEG BAXTER STREET 111,447,826 100,181,559 111,447,826 11,266,267 STATE STREET INTL EQ 141,946,648 733,537,846 818,406,374 84,868,528
TOTAL NON U.S. EQUITY PORT 346,748,429 1,067,876,629 1,180,912,143 113,035,514
100 Comprehensive Annual Financial Report INVESTMENT SECTION
FIXED INCOME PORTFOLIO YEAR ENDED JUNE 30, 2015
U.S. GOVT SECURITIES PAR VALUE COUPON RATE MATURITY COST FAIR VALUE
FHLMC POOL #H1-0069 134,915 6.000% 11-1-2036 135,032 152,137 FHLMC POOL #H1-5010 637,413 6.000% 11-1-2036 637,948 718,256 FHLMC MULTICLASS MTG 4012 MW 6,485,776 3.500% 3-15-2042 6,514,774 6,850,406 GNMA POOL #0427558 2 7.500% 4-15-2026 2 2
TOTAL U.S. GOVT SECURITIES 7,258,106 7,287,756 7,720,801
CORPORATE BONDS PAR VALUE COUPON RATE MATURITY COST FAIR VALUE
ACA ABS 2006-1 LTD 1A A3L 144A 2,431,757 Variable 6-10-2041 954,837 24 ASSOCIATES CORP OF NORTH AMERI 1,928,000 6.950% 11-1-2018 1,876,279 2,218,125 ATLANTICA TENDER DRILLING 144A 3,000,000 8.000% 9-23-2019 3,035,731 3,035,731
BGI CORE ACTIVE BOND FUND 7,888,777 158,777,255 196,569,902
BLACKROCK FIXED INCOME GLOBAL 74,072,183 75,000,000 74,072,184
CAPITAL GUARDIAN EMERGING 2,472,071 31,914,431 34,930,357 CHLOE MARINE CORP LTD 4,500,000 12.000% 12-28-2016 4,691,787 1,890,000 CONAGRA FOODS INC 856,000 9.750% 3-1-2021 929,191 1,081,693 CON-WAY INC 1,500,000 6.700% 5-1-2034 1,311,960 1,638,120
FIELD STREET FUND 76,572,220 75,000,000 76,572,220
FRANKLIN TEMPLETON EMD 11,835,827 9,875,868 11,835,827
GENERAL ELECTRIC CAPITAL CORP 3,000,000 Variable 8-7-2018 2,854,038 2,995,920 GILEAD SCIENCES INC 5,000,000 4.500% 4-1-2021 5,054,517 5,485,800 GLOBAL INVESTMENTS GROUP 144A 4,600,000 11.000% 9-24-2017 4,362,597 4,807,000
GOLDENTREE HIGH YIELD VALUE 64,272,400 50,000,000 64,272,400 GOLDMAN SACHS GROUP INC/THE 3,500,000 6.750% 10-1-2037 3,650,142 4,105,325
GRACIE INTERNATIONAL CREDIT 1,203 2,500,001 2,301,376
HSBC FINANCE CORP 6,500,000 Variable 6-1-2016 6,413,251 6,489,405
IGUAZU PARTNERS LP 85,081,108 70,000,000 85,081,109 ISLAND DRILLING CO ASA REGS 4,000,000 9.500% 4-3-2018 4,131,022 2,360,000 JP MORGAN MBS SERI R2 3A1 144A 2,054 Variable 4-28-2026 2,071 2,054 LATINA OFFSHORE LTD 144A 3,900,000 8.875% 7-3-2018 4,034,996 3,510,000 MORGAN STANLEY ABS CAPI NC1 M2 128,860 Variable 12-27-2033 115,260 127,262 MORGAN STANLEY ABS CAPI NC2 M2 111,947 Variable 12-25-2033 96,983 101,499 NORTH STREET REFE 3A CTFS 144A 1,206,457 Variable 4-30-2031 1,106,772 1,106,772 OCEANTEAM SHIPPING ASA 2,610,000 Variable 10-24-2017 2,678,341 2,349,000 ONEOK PARTNERS LP 3,400,000 6.650% 10-1-2036 3,695,188 3,556,876 PROTECTIVE LIFE CORP 3,500,000 8.450% 10-15-2039 3,963,342 4,891,285 REGIONAL DIVERSIFIED FUND 144A 1 9.250% 3-15-2030 1 1 SECURITY MUTUAL LIFE CO O 144A 6,000,000 9.375% 12-15-2016 6,059,882 6,059,882
Comprehensive Annual Financial Report 101 INVESTMENT SECTION
FIXED INCOME PORTFOLIO (cont) YEAR ENDED JUNE 30, 2015
CORPORATE BONDS PAR VALUE COUPON RATE MATURITY COST FAIR VALUE
SHORT-TERM INVESTMENT FUND B 260 260 260 SKYWAY CONCESSION CO LLC 144A 13,000,000 Variable 6-30-2026 10,161,285 10,790,000 TRAINER WORTHAM FI 2A A3L 144A 10,000,000 Variable 4-10-2037 7,496,211 100 TRI-COMMAND MILITARY HOUS 144A 4,685,873 5.383% 2-15-2048 4,228,607 4,211,147 UNITED UTILITIES PLC 2,000,000 4.550% 6-19-2018 1,932,725 2,113,300 WACHOVIA CORP 2,000,000 Variable 6-15-2017 1,954,431 1,993,020 WESTERN GROUP HOUSING LP 144A 1,900,000 6.750% 3-15-2057 2,161,216 2,167,520
TOTAL CORPORATE BONDS 417,456,998 562,020,478 624,722,496
TOTAL FIXED INCOME PORT 424,715,104 569,308,234 632,443,297
CREDIT OPPORTUNITIES PORTFOLIO CREDIT OPPORTUNITIES PORTFOLIO (cont0 YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION COST VALUE GAIN (LOSS) DESCRIPTION COST VALUE GAIN (LOSS)
BLACKROCK MORTGAGE INV 0 421 421 PAC ALLI ASIA SPEC FEEDER LP 12,311,653 14,871,671 2,560,018 BRIGHTWOOD CAPITAL FUND III 44,000,000 42,287,955 (1,712,045) PACIFIC ALLIANCE ASIA 40,000,000 53,639,539 13,639,539
CASTLE CREEK AZ TARP 19,089,574 20,694,949 1,605,375 PSPRS PNMAC MORTGOPP 130,000,000 43,168,393 (86,831,607)
CENTERBRIDGE 0 9,832,922 9,832,922 PSPRS-APOLLO EUR NPL 47,182,350 16,420,003 (30,762,347) CENTERBRIDGE SC II 34,486,877 39,426,257 4,939,380 SJC ONSHORE DIRECT LENDING 11,931,667 9,972,530 (1,959,137) COMVEST CAPITAL III L 11,690,949 10,325,143 (1,365,806) SJC ONSHORE DIRECT LENDING 44,365,614 48,072,889 3,707,275 CRESTLINE OPPORTUNITY FUND 25,151,627 23,368,943 (1,782,684) SPDR BARCLAYS HIGH YIELD BD 30,267,942 28,917,192 (1,350,750) CRESTLINE SPECIALTY LENDING 8,171,016 7,729,372 (441,644) SPDR BARCLAYS SHORT HIG 29,998,441 28,018,705 (1,979,736) DAVIDSON KEMPNER SPEC OPP 41,325,000 42,535,492 1,210,492 STARK ABS OPPORTUNITIES 623,370 882,805 259,435 EJF DEBT OPPORTUNITIES FUND 40,000,000 60,779,395 20,779,395 STELLUS CREDIT MASTER FUND 13,405,109 13,405,109 0
ESG CREDIT MACRO EVENT FUND 75,000,000 41,868,259 (33,131,741) TGP OPPORTUNITIES PTNRS III A 11,419,652 12,452,663 1,033,011 GS CREDIT OPPS FUND 2008 0 15,214 15,214 TPG OPPORTUNITIES FUND II LP 57,712,099 77,838,032 20,125,933 ISHARES IBOXX HIGH YIELD COR 7,332,016 7,435,934 103,918 WEST FACE LONG TERM OPP 40,000,000 40,286,853 286,853
MELODY CAP PTNRS ONSHORE 25,431,383 26,802,064 1,370,681 TOTAL CREDIT OPPS PORT 803,758,916 731,815,381 (71,943,535) OHA STRATEGIC CREDIT 2,862,577 10,766,677 7,904,100
102 Comprehensive Annual Financial Report INVESTMENT SECTION
PRIVATE EQUITY PORTFOLIO PRIVATE EQUITY PORTFOLIO (cont) YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION COST VALUE GAIN (LOSS) DESCRIPTION COST VALUE GAIN (LOSS)
ABRY PARTNERS 10,065,400 2,002,124 (8,063,276) NXT CAPITAL HOLDINGS LP 4,442,637 6,402,467 1,959,830 APOLLO INVESTMENT FUND VII 22,086,518 27,054,870 4,968,352 OAKTREE EURO PRINCIPAL III 38,145,179 43,348,265 5,203,086 AVALON VENTURES IX 16,889,619 20,715,786 3,826,167 ONDAX CORPORATION SERIES C 174,815 174,815 0 AVALON VENTURES X L.P. 11,706,127 14,745,974 3,039,847 ONDAX CORPORATION SERIES D 19,471 19,471 0 BARING ASIA PRIVATE EQUITY V 35,464,755 43,478,218 8,013,463 ONDAX CORPORATION SERIES E 31,547 63,094 31,547 BERKSHIRE FUND VIII-A LP 10,287,568 11,765,376 1,477,808 PATRIA - BRAZILIAN PRIVATE 5,405,073 6,259,542 854,469 BLACKSTONE CAPITAL 12,459,356 19,250,286 6,790,930 PENINSULA EQUITY PARTNERS 4,513,737 3,566,632 (947,105) CASTLE CREEK CAPITAL 20,222,284 24,088,341 3,866,057 STEPSTONE AZ SECONDARY 48,160,469 65,682,063 17,521,594 CASTLE CREEK IV 42,804,310 86,620,099 43,815,789 STERLING GROUP PARTNERS III 19,517,963 29,899,411 10,381,448 CENTERBRIDGE CAPITAL 55,541,705 56,375,738 834,033 TOWERBROOK INVESTORS III 20,957,725 27,072,215 6,114,490 CENTERBRIDGE CAPITAL PTNRS 1,241,026 1,241,026 0 TOWERBROOK INVESTORS IV 3,291,356 4,206,222 914,866 CHARLESBANK EQUITY FUND VII 23,859,533 43,566,620 19,707,087 TRIDENT CAPITAL FUND VI LP 2,994,625 3,051,095 56,470 CHARLESBANK EQUITY FUND VIII 2,908,539 3,224,413 315,874 TRIDENT V LP 33,959,526 41,985,108 8,025,582 CORTEC GROUP FUND V LP 23,152,017 32,239,564 9,087,547 TRUSTBRIDGE PARTNERS IV LP 24,873,334 43,208,197 18,334,863 CYMPHONIX NOTE PAYABLE 1,212 1,212 0 TRUSTRIDGE PARTNERS V LP 20,948,664 20,859,653 (89,011) CYMPHONIX SERIES C 16,813 16,813 0 VALLEY VENTURES III 4,454,193 2,327,242 (2,126,951) DAG VENTURES II CO-INVEST 15,888,506 6,090,882 (9,797,624) VALLEY VENTURES III ANNEX 1,451,189 491,942 (959,247) DAG VENTURES II DIRECT 5,060,945 2,801,821 (2,259,124) VISTA EQUITY PARTNERS FD V LP 4,341,751 4,424,062 82,311 DAG VENTURES III CO-INVEST 0 3,781,581 3,781,581 VISTA EQUITY PARTNERS FUND IV 35,085,355 49,038,116 13,952,761 DAG VENTURES III DIRECT 10,055,951 5,392,624 (4,663,327) VIVO CAPITAL FUND VIII LP 2,106,418 2,106,418 0 DAG VENTURES IV CO-INVEST LP 21,102,249 36,736,564 15,634,315 VIVO VENTURES VII LP 17,472,970 22,924,996 5,452,026 DAG VENTURES IV LP 23,540,405 26,293,435 2,753,030 ZANE BENEFITS INC 127,274 53,827 (73,447)
DAG VENTURES V CO-INVEST 4,000,001 3,993,482 (6,519) TOTAL PRIVATE EQUITY PORT 927,580,503 1,197,508,067 269,927,564 DAG VENTURES V LP 8,436,781 23,631,327 15,194,546 DFJ MERCURY II 17,840,902 21,254,646 3,413,744 DRUG ROYALTY TRUST 8,872,724 9,051,990 179,266 ABSOLUTE RETRN PORTFOLIO EQT VI LP 26,376,101 29,047,563 2,671,462 YEAR ENDED JUNE 30, 2015 INSIGHT EQUITY II 38,151,352 58,027,026 19,875,674 FAIR UNREALIZED INSIGHT EQUITY MEZZANINE I 1,697,962 1,968,221 270,259 DESCRIPTION COST VALUE GAIN (LOSS)
JMI EQUITY FUND VII LP 18,591,211 18,966,618 375,407 DAVIDSON KEMPNER INSTIT 70,000,000 86,081,182 16,081,182 KKR ASIAN FUND II LP 7,875,360 10,221,682 2,346,322 GSAM HF SEED 2011 24,372,768 37,231,350 12,858,582 LADDER 22,695,564 30,623,707 7,928,143 LSV SPECIAL OPPORTUNITIES 13,525 18,412,100 18,398,575 LITTLEJOHN FUND IV 30,933,469 48,340,931 17,407,462 LSV SPECIAL OPPORTUNITIES 29,151,058 49,500,405 20,349,347 LITTLEJOHN FUND V LP 5,446,018 6,081,576 635,558 LUXOR CAPITAL PARTNERS 40,000,000 43,816,138 3,816,138 LITTLEJOHN IV CO-INVEST LP 3,260,200 9,934,409 6,674,209 OZ DOMESTIC PARTNERS II LP 70,000,000 104,203,034 34,203,034
LONGWORTH VP III 12,660,000 17,582,213 4,922,213 TOTAL ABSOLUTE RETURN PORT 233,537,351 339,244,209 105,706,858 MADRONA VENTURE FUND V LP 2,513,046 2,922,757 409,711 MERCURY FUND VENTURES III LP 4,070,000 3,346,191 (723,809) MESIROW CAPITAL PARTNERS IX 13,741,475 7,795,402 (5,946,073) MIDOCEAN PARTNER III CO-INV 332,196 2,845,223 2,513,027 MIDOCEAN PARTNER III DIRECT 29,227,701 33,109,168 3,881,467 MILLENNIUM TECHNOLOGY 14,028,331 14,115,715 87,384
Comprehensive Annual Financial Report 103 INVESTMENT SECTION
REAL ASSETS PORTFOLIO REAL ESTATE PORTFOLIO YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION COST VALUE GAIN (LOSS) DESCRIPTION COST VALUE GAIN (LOSS)
ACTIS ENERGY 3 A LP 9,959,166 5,869,028 (4,090,138) 12TH ST & BELL 5,001,890 2,000,000 (3,001,890) ACTIS GP LLP BEVI III LP 7,238,259 5,206,727 (2,031,532) 29TH AVE & CAMELBACK 1,212,374 1,200,000 (12,374) ALTERNA CORE ASSETS II 14,158,808 13,016,084 (1,142,724) 32ND ST & VAN BUREN 3,482,103 5,400,000 1,917,897 ALTERNA I 21,096,713 27,064,976 5,968,263 44TH AVE & NORTHERN 1,746,055 700,000 (1,046,055) CONSERVATION FORESTRY I 15,287,771 15,274,777 (12,994) 67TH AVE & GREENWAY 2,309,956 500,000 (1,809,956) CONSERVATN FOREST II 22,594,092 29,894,077 7,299,985 ALCION RE PARTNERS FUND II 14,572,340 14,848,167 275,827 DENHAM COMMODITY PART VI 15,836,973 19,880,539 4,043,566 ARES US REAL ESTATE FUND VII 29,297,687 36,143,373 6,845,686 EIF US POWER FUND IV 21,031,818 21,699,252 667,434 BLACKSTONE REAL ESTATE VI 23,748,270 52,703,142 28,954,872 ENCAP ENERGY CAPITAL FUND IX 14,435,171 13,851,516 (583,655) BPE ASIA REAL ESTATE FUND LP 4,966,373 4,852,797 (113,576) ENCAP ENERGY CAPITAL FUND X 1,670,618 1,670,618 0 CATALYST EPF II SCOTS LP 8,186,228 7,663,755 (522,473) ENERGY SELECT SECTOR SPDR 28,374,499 26,802,056 (1,572,443) CATALYST EUROPEAN 28,758,247 27,872,032 (886,215) FIRST TRUST ISE-REV NAT GAS 12,842,047 7,518,420 (5,323,627) CLEARBELL II FEEDER LP 16,412,641 10,106,450 (6,306,191)
FUNDAMENTAL PARTNERS II 59,630,847 65,879,666 6,248,819 DTR1 C POOL 157,188,280 138,000,000 (19,188,280) FUNDAMENTAL PARTNERS III LP 4,995,791 4,995,791 0 DTR1 POOL 233,102,746 123,200,000 (109,902,746) JP MORGAN AIRRO FUND 22,907,989 26,979,146 4,071,157 FROGMORE REAL ESTATE PART 12,356,817 11,150,648 (1,206,169) JP MORGAN AIRRO SIDECAR LP 22,869,167 26,603,877 3,734,710 FUDO CAPITAL II LP 14,697,088 12,082,141 (2,614,947) LD COMMODITIES ALPHA FD LTD 25,000,000 26,931,388 1,931,388 GREENFIELD ACQUISITION 15,845,341 16,217,654 372,313 MACQUARIE EUR INFRASTRUCT III 18,066,753 26,482,107 8,415,354 GREENFIELD ACQUISITION VI 22,774,607 28,501,596 5,726,989 MACQUARIE INFRA II US 15,007,015 17,752,663 2,745,648 H/2 CREDIT PARTNERS L.P. 40,000,000 55,825,229 15,825,229 MAGNETAR FINANCIAL LLC CMLP 4,172,991 4,924,816 751,825 HARRISON ST RE COINV 0 74,338 74,338 MAGNETAR MTP 80,000,000 76,054,456 (3,945,544) HARRISON STREET REAL ESTATE 15,754,463 10,588,852 (5,165,611) ORG SECONDARY - REAL ASSETS 11,116,050 22,284,486 11,168,436 IRON POINT RE PARTNERS III LP 934,472 934,472 0 ORION MINE FINANCE FD I-A LP 7,450,276 6,283,071 (1,167,205) IRON POINT REAL ESTATE 5,967,280 6,570,253 602,973
SPDR GOLD SHARES 91,484,191 79,409,632 (12,074,559) IRONPOINT RE 34,666,311 47,383,205 12,716,894 SPDR S&P METALS & MINING ETF 12,994,196 7,510,671 (5,483,525) LUBERT-ADLER RE FDS PROJECT 12,000,000 12,005,279 5,279 TAYLOR WOODS PARTNERS LP 55,000,000 58,109,382 3,109,382 LUBERT-ADLER RE FUND VII LP 10,000,000 9,256,762 (743,238) TRUST IN ENERGY RECAP FUND 11,407,014 9,570,603 (1,836,411) LUBERT-ALDER RE VI-B 8,828,918 17,641,813 8,812,895 TVEST CROSSOVER III 15,709,247 18,055,482 2,346,235 ORG SECONDARY FUND 49,556,370 53,897,336 4,340,966
TOTAL REAL ASSETS PORT 642,337,462 665,575,307 23,237,845 OWC WHISPERING CANYON 29,677,109 4,100,000 (25,577,109) PATRON CAPITAL IV LP 5,450,462 6,759,678 1,309,216
PEBBLE CREEK 38,050,000 12,000,000 (26,050,000) PIVOTAL REALTY HOLD/TALLEY 2,500,000 8,400,000 5,900,000 PSPRS-MOUNT GRANGE 10,998,463 29,416,546 18,418,083 ROCKBRIDGE HOSPITALITY FD VI 7,318,403 7,729,473 411,070 WALTON ST MEXICO FUND I-Q LP 34,971,212 26,955,265 (8,015,947) WALTON STREET REAL ESTATE 21,721,355 24,844,972 3,123,617
TOTAL REAL ESTATE PORT 924,053,861 827,525,228 (96,528,633)
104 Comprehensive Annual Financial Report INVESTMENT SECTION
RISK PARITY PORTFOLIO GTAA SECURITIES PORTFOLIO YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015
FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION COST VALUE GAIN (LOSS) DESCRIPTION COST VALUE GAIN (LOSS)
BRIDGEWATER RA FUND 80,000,000 78,735,747 (1,264,253) ALPHADYNE INVESTMENT 50,000,000 53,028,563 3,028,563 BRIDGEWTR ALL WEATHR 119,932,042 138,654,646 18,722,604 BLUE TREND FUND 61,249,488 67,892,176 6,642,688 RISK PARITY FUNDS 50,411,336 50,640,563 229,227 BREVAN HOWARD FUND 50,000,000 50,409,745 409,745 FFTW TIPS/CURRENCY 44,352,146 43,805,544 (546,602) BRIDGEWATER PURE ALPHA 156,169,682 304,396,308 148,226,626
TOTAL RISK PARITY PORT 294,695,524 311,836,500 17,140,976 BRIDGEWATER PURE ALPHA MAJ 30,000,000 38,976,481 8,976,481 D. E. SHAW MULTI-ASSET FUND 145,000,000 188,231,108 43,231,108 GMO BFA FUND 110,000,000 108,678,476 (1,321,524)
TOTAL GTAA SECURITIES PORT 602,419,170 811,612,857 209,193,687
INVESTMENT MANAGEMENT FEES
INVESTMENT MANAGEMENT FEES INVESTMENT MANAGEMENT FEES BY ASSET CLASS BY ASSET CLASS (IN MILLIONS OF DOLLARS) (AS A PERCENTAGE OF TOTAL)
$30.0 $27.7 Absolute Return 1.08% 7.31% $23.3 $25.0 21.49% $22.3 Credit Opps 12.97%
$20.0 Equity $16.7 Fixed Income $15.0 $11.9 $12.0 GTAA 9.24% $9.4 9.29% $10.0 Private Equity
$4.1 $5.0 Real Assets 3.21% $1.4 Real Estate $0.0 17.33% 18.07% Absolute Credit Equity Fixed GTAA Private Real Real Risk Risk Parity Return Opps Income Equity Assets Estate Parity
All investment manager fees, whether directly invoiced or fees (including carried interest allocations), and other ex‐ deducted from the fund on a net basis, are classified and penses such as organizational expenses in limited partner‐ reported as investment expense. While some investment ship structures. The total netted fee amounts reported also managers submit invoices for their investment manage‐ reflect the impact of any offsets which have the effect of ment fees, a significant number of investment managers reducing this total. Therefore, in order to compare invest‐ provide account valuations on a net of fee basis. Those ment expense as reported by the System with investment management fees are often netted against investment in‐ management costs reported by other public pension plans, come and are not readily separable. For greater transpar‐ an understanding of the actual fees and expenses included ency, the System makes a good faith attempt to disaggre‐ in any comparative reports is necessary. Additionally, in‐ gate netted fee amounts that are not necessarily readily vestment plan composition directly influences the fee separable. The System collects and aggregates the netted structure of a plan and adjustments for differences in plan investment fees and checks for reasonableness in order to asset allocation is necessary before conclusions can be disclose fees that would not otherwise be disclosed. The reached from such comparisons. collection process is not standard practice for many plan sponsors. The netted investment expenses include amounts for investment management fees, performance
Comprehensive Annual Financial Report 105 INVESTMENT SECTION
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106 Comprehensive Annual Financial Report ACTUARIAL SECTION ACTUARIAL SECTION
October 29, 2015
The Board of Trustees Arizona Public Safety Personnel Retirement System 3010 East Camelback Road, Suite 200 Phoenix, Arizona 85016-4416
Re: Arizona Public Safety Personnel Retirement System
Attention: Jared Smout, Administrator
The purpose of the annual actuarial valuation of the Arizona Public Safety Personnel Retirement System as of June 30, 2015 is to:
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and non- retired members. Compare assets with accrued liabilities to assess the funded condition. Compute the recommended employers’ contribution for the Fiscal Year beginning July 1, 2016.
The funding objective is stated in Article 4, Chapter 5, Title 38, Section 843B of the Arizona Revised Stat- utes. The valuation should not be relied upon for any other purpose.
The valuation process develops contribution rates that are sufficient to fund the plan’s normal cost (i.e., the costs assigned by the valuation method to the year of service about to be rendered), as well as to fund un- funded actuarial accrued liabilities as a level percent of active member payroll over a finite period. The valuations were completed based upon population data, asset data, and plan provisions as of June 30, 2015.
The valuation was based upon information furnished by the plan’s administrative staff concerning Retire- ment System benefits, financial transactions, and active members, terminated members, retirees and benefi- ciaries. We checked the data for internal and year-to-year consistency, but did not otherwise audit the data. As a result, we do not assume responsibility for the accuracy or completeness of the data provided. The ac- tuary summarizes and tabulates population data in order to analyze longer-term trends. The following schedules were prepared by the actuary and provided to the administrative staff to be included in the “Actuarial Section” of the June 30, 2015 CAFR:
Aggregate Actuarial Balance Sheet as of June 30, 2015 Summary of Valuation Assumptions Solvency Test Summary of Active Member Data Summary of Retirees and Inactive Members Schedule of Experience Gain/(Loss) for year ended June 30, 2015
108 Comprehensive Annual Financial Report ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 2
GRS did not prepare any of the schedules included in the “Financial Section” of the June 30, 2015 CAFR. However, we did provide certain pieces of information that were used in that section, such as the Actuarial Accrued Liability and the Actuarial Value of Assets.
Assets are valued on a market related basis. This method recognizes the assumed return fully each year and spreads each year’s gain or loss above or below assumed return over a closed 7-year period. The continuing effect of prior asset losses was dampened by the 7-year smoothing period, and further offset by the effect of lower than assumed pay increases. There remains $148.7 million ($142.0 million for pension and $6.7 mil- lion for health) of unrecognized investment losses that will in the absence of other gains, drive the contribu- tion rate up over the next several years.
Actuarial valuations are based upon assumptions regarding future activity in specific risk areas including the rates of investment return and payroll growth, eligibility for the various classes of benefits, and longev- ity among retired lives. The Board of Trustees adopts these assumptions after considering the advice of the actuary and other professionals. The assumptions and the methods comply with the requirements of State- ment No. 67 of the Governmental Accounting Standards Board. Each actuarial valuation takes into account all prior differences between actual and assumed experience in each risk area and adjusts the contribution rates as needed. The June 30, 2015 valuations were based upon assumptions that were recommended in connection with a study of experience covering the 2006-2011 period. Future actuarial measurements may differ significantly from those presented in the valuations due to such factors as experience differing from that anticipated by the actuarial assumptions, changes in plan provisions, changes in actuarial assumptions or methods, or changes in applicable law.
Based upon the results of the June 30, 2015 valuations, the retired lives are less than fully funded on a fund- ing value of assets basis and market value of asset basis. It is most important that this plan receive contributions at least equal to the actuarial rates.
The June 30, 2015 actuarial valuation reflected the following changes:
Benefit changes o Interest on DROP for employees who became members before December 31, 2011 that have AT LEAST 20 years of credited service on January 1, 2012 will be 7.50% for the fiscal year beginning July 1, 2015. o Interest on DROP for employees who became members before December 31, 2011 that have LESS THAN 20 years of credited service on January 1, 2012 will be 3.10% for the fiscal year beginning July 1, 2015.
In order to gain a full understanding of the actuarial condition of the plan, it is important to read the full ac- tuarial report that we have provided to the System.
Comprehensive Annual Financial Report 109 ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 3
Mark Buis and James D. Anderson are Members of the American Academy of Actuaries (MAAA), and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein.
Respectfully submitted,
Mark Buis, FSA, EA, FCA, MAAA
James D. Anderson, FSA, MAAA
MB/JDA:sc
110 Comprehensive Annual Financial Report ACTUARIAL SECTION
PSPRS AGGREGATE ACTUARIAL BALANCE SHEET YEAR ENDED JUNE 30, 2015
HEALTH ACTUARIAL ASSETS PENSION INSURANCE TOTAL
ACCRUED ASSETS Member Accumulated Contributions 1,295,884,708 0 1,295,884,708 Employer and Benefit Payment Reserves 4,779,884,012 308,677,610 5,088,561,622 Funding Value Adjustment 142,017,851 6,675,901 148,693,752 Total Accrued Assets 6,217,786,571 315,353,511 6,533,140,082
PROSPECTIVE ASSETS Member Contributions 1,331,372,002 0 1,331,372,002 Employer Normal Costs 904,835,842 38,133,342 942,969,184 Employer Unfunded Actuarial Accrued Liability 6,468,013,848 (20,943,243) 6,447,070,605 Total Prospective Assets 8,704,221,692 17,190,099 8,721,411,791
Total Actuarial Assets 14,922,008,263 332,543,610 15,254,551,873
ACTUARIAL PRESENT VALUES (LIABILITY)
PENSIONS IN PAYMENT STATUS Pensions in payment status 6,675,835,327 127,614,462 6,803,449,789
PROSPECTIVE PAYMENTS Retirement Payments 8,173,750,352 0 8,173,750,352 Health Insurance Payments 0 204,929,148 204,929,148 Member Contribution Refunds 72,422,584 0 72,422,584 Pension Increase Reserve 0 0 0 Total Prospective Payments 8,246,172,936 204,929,148 8,451,102,084
Total Actuarial Present Values (Liabilities) 14,922,008,263 332,543,610 15,254,551,873
Comprehensive Annual Financial Report 111 ACTUARIAL SECTION
PSPRS SUMMARY OF VALUATION ASSUMPTIONS
ECONOMIC ASSUMPTIONS ACTIVE MEMBERS MORTALITY TABLE Interest Rate: 7.85% (net of expenses) Sample rates of mortality for death‐in‐service set forward Salary Increases: 4.00% for inflation 0 years for both males and females. This assumption was first used for the FY2012 valuation of the System. HEALTHY MORTALITY RP2000 Health Annuitant Mortality Table projected to Retirement benefits will commence the first day of the 2015 using projection scale AA adjusted by 105% for both month following termination of employment and based males and females. This assumption was first used for the upon completion of 20 years of service, or following 62nd FY2012 valuation of the System and include margin for birthday and completion of 15 years of service. future improvements in mortality.
DISABLED MORTALITY RP2000 Health Annuitant Mortality Table projected to 2015 using projection scale AA set forward 10 years for both males and females. This assumption was first used for the FY2012 valuation of the System.
MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES HEALTHY MORTALITY HEALTHY MORTALITY ACTIVE MEMBERS
PROBABILITY OF FUTURE LIFE PROBABILITY OF FUTURE LIFE PROBABILITY OF DYING NEXT YEAR SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 70 1.77% 1.55% 14.56 16.49 70 1.77% 1.55% 14.56 16.49 75 3.06% 2.49% 11.04 12.95 75 3.06% 2.49% 11.04 12.95 80 5.54% 4.13% 8.00 9.80 80 5.54% 4.13% 8.00 9.80
112 Comprehensive Annual Financial Report ACTUARIAL SECTION
PSPRS MISCELLANEOUS AND TECHNICAL ASSUMPTIONS
MARRIAGE ASSUMPTION NORMAL FORM OF BENEFIT 85% of males and females are assumed to be married for A straight life payment is the assumed normal form of purposes of death‐in‐service benefits. Male spouses are benefit for members who are not married, and the 80% assumed to be three years older than female spouses for Joint and Survivor form of payment with no reduction, for active member valuation purposes. married members. 85% of members are assumed to be married at time of retirement. PAY INCREASE TIMING Six months after the valuation date. BENEFIT SERVICE Exact fractional service is used to determine the amount of DECREMENT TIMING benefit payable. Decrements of all types are assumed to occur mid‐year. NORMAL COST PERCENTAGE ELIGIBILITY TESTING For the purposes of calculating the Normal Cost as a per‐ Eligibility for benefits is determined based upon the age cent of payroll under the Entry Age Normal Cost Method, nearest birthday and service nearest whole year on the the Normal Cost was projected with interest to the applica‐ date the decrement is assumed to occur. ble Fiscal Year and divided by the Payroll projected with wage base to the applicable Fiscal Year. DECREMENT RELATIVITY Decrement rates are used directly from the experience HEALTH CARE UTILIZATION study, without adjustment for multiple decrement table 75% of future retirees are expected to utilize health care. effects. 85% of those are assumed to be married.
DECREMENT OPERATION FUTURE COST OF LIVING INCREASES Disability and turnover decrements do not operate during Future cost of living increases are not reflected in the li‐ retirement eligibility. abilities. The 2012 Experience Study recommended reduc‐ ing the expected rate of return by approximately 0.5% to SERVICE CREDIT ACCRUALS account for this contingency. It is assumed that members accrue one year of service credit per year.
INCIDENCE OF CONTRIBUTIONS Contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made.
Comprehensive Annual Financial Report 113 ACTUARIAL SECTION
PSPRS SUMMARY OF ACTIVE MEMBER DATA
AGE AND SERVICE DISTRIBUTION Listed below is a summary of Active Members by age group, years of service and annual compensation. The summary points out that there were 18,409 active members in the System as of June 30, 2015, compared to 18,526 for the prior year.
YEARS OF SERVICE TO VALUATION DATE TOTALS AVG. AGE 0-4 5-9 10-14 15-19 20-24 25-29 30+ NO. SALARY < 24 391 391 50,598 25-29 1,390 363 1 1,754 55,903 30-34 948 1,911 431 3,290 67,534 35-39 490 1,321 1,491 346 1 3,649 74,976 40-44 228 759 1,198 1,435 211 4 3,835 81,751 45-49 143 347 702 1,133 699 132 2 3,158 86,450 50-54 46 169 293 457 355 241 31 1,592 87,436 55-59 20 64 104 195 104 76 24 587 84,217 60-64 15 18 26 46 16 11 4 136 81,523 65+ 5 4 5 2 1 17 77,709 Total 3,671 4,957 4,250 3,617 1,386 466 62 18,409 76,114
COMPARATIVE SCHEDULE
YEAR ENDED ACTIVE PAYROLL AGE SERVICE AVERAGE INCREASE IN JUNE 30, MEMBERS +000 (YEARS) (YEARS) SALARY AVG. PAY 2006 17,324 1,073,685 37.4 9.0 61,977 3.70% 2007 18,624 1,228,037 37.3 8.9 65,938 6.30% 2008 19,912 1,383,332 37.3 8.9 69,472 5.40% 2009 19,867 1,415,643 37.8 9.4 71,256 2.60% 2010 19,468 1,400,547 38.4 10.0 71,941 1.00% 2011 18,638 1,325,350 38.6 10.2 71,110 -1.20% 2012 18,542 1,349,252 39.1 10.6 72,767 2.30% 2013 18,436 1,370,609 39.5 11.1 74,344 2.20% 2014 18,526 1,390,346 39.7 11.2 75,048 0.90% 2015 18,409 1,401,178 39.7 11.3 76,114 1.40%
114 Comprehensive Annual Financial Report ACTUARIAL SECTION
PSPRS SUMMARY OF INACTIVE MEMBER DATA
As of June 30, 2015, there were 1,923 inactive members in SUMMARY OF INACTIVE MEMBERS the System who had not withdrawn their accumulated FOR THE YEAR ENDED JUNE 30, 2015 member contributions. It is assumed that these inactive YEARS OF SERVICE TO VALUATION DATE ATTAINED members are waiting to meet the age requirements for a AGE 0-4 5-9 10-14 15-19 20+ TOTAL deferred annuity (A.R.S.§38‐846.01). They are broken < 30 323 32 355 down by attained age and years of service as follows: 30-39 629 189 31 1 850 40-44 202 57 35 14 1 309 45-49 121 36 35 15 5 212 50-54 62 17 22 8 4 113 55-59 26 12 8 4 1 51 60-69 10 5 8 6 1 30 70+ 2 1 3 Total 1,375 348 140 48 12 1,923
PSPRS SUMMARY OF RETIRED MEMBER DATA
PSPRS RETIRANTS AND BENEFICIARIES NUMBER ANNUAL ANNUAL REMOVED NUMBER ALLOWANCES ALLOWANCES YEAR ENDED FROM ADDED REMOVED ADDED TO ANNUAL PERCENT AVERAGE JUNE 30, ROLES TO ROLES TOTALS FROM ROLES ROLES PENSIONS INCREASE PENSION 2006 164 350 6,874 4,721,490 13,926,144 265,826,712 8.8% 38,671 2007 159 918 7,633 3,578,561 45,409,478 307,657,629 15.7% 40,306 2008 164 772 8,241 3,642,137 38,830,259 342,845,751 11.4% 41,602 2009 222 590 8,609 11,175,896 47,338,063 379,007,918 10.5% 44,025 2010 139 484 8,954 5,756,060 37,338,661 410,590,518 8.3% 45,856 2011 130 698 9,522 5,139,598 49,120,961 454,571,881 10.7% 47,739 2012 138 418 9,802 5,859,981 36,291,206 485,003,106 6.7% 49,480 2013 186 543 10,159 8,308,593 26,893,778 503,588,291 3.8% 49,571 2014 195 560 10,524 8,599,683 48,220,721 543,209,329 7.9% 51,616 2015 184 694 11,034 7,890,225 36,611,404 571,930,508 5.3% 51,833
Comprehensive Annual Financial Report 115 ACTUARIAL SECTION
October 29, 2015
The Board of Trustees Arizona Elected Officials’ Retirement System 3010 East Camelback Road, Suite 200 Phoenix, Arizona 85016-4416
Re: Arizona Elected Officials’ Retirement Plan
Attention: Jared A. Smout, Administrator
The purpose of the annual actuarial valuation of the Arizona Elected Officials’ Retirement Plan as of June 30, 2015 is to:
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and non- retired members. Compare assets with accrued liabilities to assess the funded condition. Compute the recommended employers’ contribution for the Fiscal Year beginning July 1, 2016.
The funding objective is stated in Article 4, Chapter 5, Title 38, Sections 810C-D of the Arizona Revised Statutes. The valuation should not be relied upon for any other purpose.
The valuation process develops contribution rates that are sufficient to fund the Plan’s normal cost (i.e., the costs assigned by the valuation method to the year of service about to be rendered), as well as to fund un- funded actuarial accrued liabilities as a level percent of active member payroll over a finite period. The valuations were completed based upon population data, asset data, and plan provisions as of June 30, 2015.
The valuation was based upon information furnished by the plan’s administrative staff concerning Retire- ment Plan benefits, financial transactions, and active members, terminated members, retirees and benefici- aries. We checked the data for internal and year-to-year consistency, but did not otherwise audit the data. As a result, we do not assume responsibility for the accuracy or completeness of the data provided. The ac- tuary summarizes and tabulates population data in order to analyze longer-term trends. The following schedules were prepared by the actuary and provided to the administrative staff to be included in the “Actuarial Section” of the June 30, 2015 CAFR:
Aggregate Actuarial Balance Sheet as of June 30, 2015 Summary of Valuation Assumptions Solvency Test Summary of Active Member Data Summary of Retirees and Inactive Members Schedule of Experience Gain/(Loss) for year ended June 30, 2015
116 Comprehensive Annual Financial Report ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 2
GRS did not prepare any of the schedules included in the “Financial Section” of the June 30, 2015 CAFR. However, we did provide certain pieces of information that were used in that section, such as the Actuarial Accrued Liability and the Actuarial Value of Assets.
Assets are valued on a market related basis. This method recognizes the assumed return fully each year and spreads each year’s gain or loss above or below assumed return over a closed 7-year period. The continuing effect of prior asset losses was dampened by the 7-year smoothing period, and further offset by the effect of lower than assumed pay increases. There remains $7.2 million ($6.7 million for pension and $0.5 million for health) of unrecognized investment losses that will in the absence of other gains, drive the contribution rate up over the next several years.
Actuarial valuations are based upon assumptions regarding future activity in specific risk areas including the rates of investment return and payroll growth, eligibility for the various classes of benefits, and longev- ity among retired lives. The Board of Trustees adopts these assumptions after considering the advice of the actuary and other professionals. The assumptions and the methods comply with the requirements of State- ment No. 67 of the Governmental Accounting Standards Board. Each actuarial valuation takes into account all prior differences between actual and assumed experience in each risk area and adjusts the contribution rates as needed. The June 30, 2015 valuations were based upon assumptions that were recommended in connection with a study of experience covering the 2006-2011 period. Future actuarial measurements may differ significantly from those presented in the valuations due to such factors as experience differing from that anticipated by the actuarial assumptions, changes in plan provisions, changes in actuarial assumptions or methods, or changes in applicable law.
Based upon the results of the June 30, 2015 valuations, the retired lives are less than fully funded on a fund- ing value of assets basis and market value of assets basis. It is most important that this plan receive contri- butions at least equal to the actuarial rates. The Plan’s funded status as of June 30, 2015 is 38.8%, and the actuarially determined contribution has increased from 86.54% to 95.56% of payroll. The changes reflect continued investment loss phase-in, and are expected to be exacerbated going forward as statutorily re- quired contributions that were set prior to the Fields case will increasingly fall behind the Actuarially Deter- mined Contribution. The statutorily required contribution of 23.5% of payroll plus court fees and a $5 mil- lion appropriation is calculated to equal $29.7 million for FY17, well short of the Actuarially Determined Contribution of $59.2 million.
In order to gain a full understanding of the actuarial condition of the plan, it is important to read the full ac- tuarial report that we have provided to the Plan.
Comprehensive Annual Financial Report 117 ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 3
Mark Buis and James D. Anderson are Members of the American Academy of Actuaries (MAAA), and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein.
Respectfully submitted,
Mark Buis, FSA, EA, FCA, MAAA
James D. Anderson, FSA, MAAA
MB/JDA:sc
118 Comprehensive Annual Financial Report ACTUARIAL SECTION
EORP AGGREGATE ACTUARIAL BALANCE SHEET YEAR ENDED JUNE 30, 2015
HEALTH ACTUARIAL ASSETS PENSION INSURANCE TOTAL
ACCRUED ASSETS Member Accumulated Contributions 56,386,875 0 56,386,875 Employer and Benefit Payment Reserves 252,281,549 22,597,987 274,879,536 Funding Value Adjustment 6,718,934 445,549 7,164,483 Total Accrued Assets 315,387,358 23,043,536 338,430,894
PROSPECTIVE ASSETS Member Contributions 43,195,186 0 43,195,186 Employer Normal Costs 35,616,295 1,644,572 37,260,867 Employer Unfunded Actuarial Accrued Liability 498,063,002 (10,682,621) 487,380,381 Total Prospective Assets 576,874,483 (9,038,049) 567,836,434
Total Actuarial Assets 892,261,841 14,005,487 906,267,328
ACTUARIAL PRESENT VALUES (LIABILITY)
PENSIONS IN PAYMENT STATUS Pensions in payment status 601,710,784 8,237,142 609,947,926
PROSPECTIVE PAYMENTS Retirement Payments 289,430,276 0 289,430,276 Health Insurance Payments 0 5,768,345 5,768,345 Member Contribution Refunds 1,120,781 0 1,120,781 Pension Increase Reserve 0 0 0 Total Prospective Payments 290,551,057 5,768,345 296,319,402
Total Actuarial Present Values (Liabilities) 892,261,841 14,005,487 906,267,328
Comprehensive Annual Financial Report 119 ACTUARIAL SECTION
EORP SUMMARY OF VALUATION ASSUMPTIONS
ECONOMIC ASSUMPTIONS ACTIVE MEMBER MORTALITY TABLE Interest Rate: 7.85% (net of expenses) Sample rates of mortality for death‐in‐service set forward Salary Increases: 4.25% for inflation 0 years for both males and females. This assumption was first used for the FY2013 valuation of the System. HEALTHY MORTALITY TABLE RP2000 Health Annuitant Mortality Table projected to Active members are eligible to retire early at any age 2025 using projection scale AA with no adjustments for within 5 years of service, or normally at any age with 20 males and females. This assumption was first used for the years of service, at age 62 with 10 years of service, or at FY2012 valuation of the System and include margin for age 65 with 5 years of service. Pensions were assumed to future improvements in mortality. be decreased 3/12 of 1% for each month the age at early retirement precedes normal retirement age, with a maxi‐ DISABLED MORTALITY TABLES mum reduction of 30%. RP2000 Health Annuitant Mortality Table projected to 2025 using projection scale AA set forward 10 years for These rates adopted by the Board of Trustees, as recom‐ both males and females. This assumption was first used mended by the Plan’s actuary, were first used for the June for the FY2012 valuation of the System. 30, 2007 valuation.
MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES HEALTHY MORTALITY HEALTHY MORTALITY ACTIVE MEMBERS
PROBABILITY OF FUTURE LIFE PROBABILITY OF FUTURE LIFE PROBABILITY OF DYING NEXT YEAR SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 70 1.77% 1.55% 14.56 16.49 70 1.77% 1.55% 14.56 16.49 75 3.06% 2.49% 11.04 12.95 75 3.06% 2.49% 11.04 12.95 80 5.54% 4.13% 8.00 9.80 80 5.54% 4.13% 8.00 9.80
120 Comprehensive Annual Financial Report ACTUARIAL SECTION
EORP MISCELLANEOUS AND TECHNICAL ASSUMPTIONS
MARRIAGE ASSUMPTION NORMAL FORM OF BENEFIT 85% of males and females are assumed to be married for A straight life payment is the assumed normal form of purposes of death‐in‐service benefits. Male spouses are benefit for members who are not married, and the 75% assumed to be three years older than female spouses for Joint and Survivor form of payment with no reduction, for active member valuation purposes. married members. 85% of members are assumed to be married at time of retirement. PAY INCREASE TIMING Six months after the evaluation date. BENEFIT SERVICE Exact fractional service is used to determine the amount of DECREMENT TIMING benefit payable. Decrements of all types are assumed to occur mid‐year. NORMAL COST PERCENTAGE ELIGIBILITY TESTING For the purposes of calculating the Normal Cost as a per‐ Eligibility for benefits is determined based upon the age cent of payroll under the Projected Unit Credit Cost nearest birthday and service nearest whole year on the Method, the Normal Cost was projected with interest to the date the decrement is assumed to occur. applicable Fiscal Year and divided by the Payroll projected with wage base to the applicable Fiscal Year. DECREMENT RELATIVITY Decrement rates are used directly from the experience HEALTH CARE UTILIZATION study, without adjustment for multiple decrement table 70% of future retirees are expected to utilize health care. effects. 85% of those are assumed to be married.
DECREMENT OPERATION FUTURE COST OF LIVING INCREASES Disability and turnover decrements do not operate during Future cost of living increases are not reflected in the li‐ retirement eligibility. abilities. The 2012 Experience Study recommended reduc‐ ing the expected rate of return by approximately 0.5% to SERVICE CREDIT ACCRUALS account for this contingency. It is assumed that members accrue one year of service credit per year.
INCIDENCE OF CONTRIBUTIONS Contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made.
Comprehensive Annual Financial Report 121 ACTUARIAL SECTION
EORP SUMMARY OF ACTIVE MEMBER DATA
AGE AND SERVICE DISTRIBUTION Listed below is a summary of Active Members by age group, years of service and annual compensation. The summary points out that there were 738 active members in the Plan as of June 30, 2015, decreased from 843 for the prior year.
YEARS OF SERVICE TO VALUATION DATE TOTALS AVG. AGE 0-4 5-9 10-14 15-19 20-24 25-29 30+ NO. SALARY < 24 0 0 25-29 2 2 30,416 30-34 10 4 14 40,961 35-39 18 8 1 1 28 42,400 40-44 27 15 8 50 79,190 45-49 36 25 10 1 72 91,466 50-54 46 45 26 16 4 137 97,357 55-59 42 35 41 26 4 2 150 92,840 60-64 26 37 38 24 15 2 142 89,903 65+ 31 39 28 30 8 4 3 143 66,691 Total 238 208 152 98 31 6 5 738 83,921
COMPARATIVE SCHEDULE
YEAR ENDED ACTIVE PAYROLL AGE SERVICE AVERAGE INCREASE IN JUNE 30, MEMBERS +000 (YEARS) (YEARS) SALARY AVG. PAY 2006 800 54,696 54.3 8.3 68,370 -0.10% 2007 813 61,308 54.4 8.3 75,409 10.30% 2008 824 62,184 54.6 8.4 75,474 0.10% 2009 857 67,777 54.6 8.1 79,086 4.80% 2010 827 66,442 55.1 8.5 80,341 1.60% 2011 845 66,637 54.6 8.0 78,860 -1.80% 2012 845 67,934 55.3 8.5 80,395 1.90% 2013 839 67,505 54.9 8.0 80,459 0.10% 2014 843 68,341 55.6 8.6 81,069 0.80% 2015 738 61,933 56.2 9.3 83,921 3.50%
Group averages are not used in the actuarial computations but are computed and shown because of their general interest. Reflects the 1985 amendment consolidating the Judges' Retirement System and the Elected Officials' Retire‐ ment Plan. Includes participating municipalities pursuant to a 1987 amend‐ ment beginning with the June 30, 1988, valuation.
122 Comprehensive Annual Financial Report ACTUARIAL SECTION
EORP SUMMARY OF INACTIVE MEMBER DATA
As of June 30, 2015, there were 171 inactive members in the SUMMARY OF INACTIVE MEMBERS Plan who had not withdrawn their accumulated member FOR THE YEAR ENDED JUNE 30, 2015 contributions. It is assumed that these inactive members YEARS OF SERVICE TO VALUATION DATE ATTAINED are waiting to meet the age requirements for service retire‐ AGE 0-4 5-9 10-14 15-19 20+ TOTAL ment. They are broken down by attained age and years of < 30 0 service as follows: 30-39 8 3 1 12 40-44 14 4 3 21 45-49 8 9 1 18 50-54 13 7 3 1 24 55-59 14 22 4 1 1 42 60-69 19 16 6 5 1 47 70+ 3 2 1 1 7 Total 79 63 17 9 3 171
EORP SUMMARY OF RETIRED MEMBER DATA
EORP RETIRANTS AND BENEFICIARIES NUMBER ANNUAL ANNUAL REMOVED NUMBER ALLOWANCES ALLOWANCES YEAR ENDED FROM ADDED REMOVED ADDED TO ANNUAL PERCENT AVERAGE JUNE 30, ROLES TO ROLES TOTALS FROM ROLES ROLES PENSIONS INCREASE PENSION 2006 20 48 797 1,188,444 2,482,196 28,044,340 7.4% 35,187 2007 29 58 826 842,516 3,178,426 30,380,250 8.3% 36,780 2008 29 75 872 668,820 3,138,910 32,850,340 8.1% 37,672 2009 47 80 905 987,408 4,399,639 36,262,571 10.4% 40,069 2010 25 41 921 666,409 3,740,863 39,337,025 8.5% 42,711 2011 32 101 990 1,182,916 5,307,555 43,461,664 10.5% 43,901 2012 33 35 992 1,277,532 1,726,008 43,910,140 1.0% 44,264 2013 26 91 1,057 915,428 4,208,986 47,203,698 7.5% 44,658 2014 42 38 1,053 1,363,194 7,164,962 53,005,466 12.3% 50,338 2015 23 86 1,116 831,841 4,570,428 56,744,053 7.1% 50,846
Comprehensive Annual Financial Report 123 ACTUARIAL SECTION
October 29, 2015
The Board of Trustees Arizona Corrections Officer Retirement Plan 3010 East Camelback Road, Suite 200 Phoenix, Arizona 85016-4416
Re: Arizona Corrections Officer Retirement Plan
Attention: Jared A. Smout, Administrator
The purpose of the annual actuarial valuation of the Arizona Corrections Officer Retirement Plan as of June 30, 2015 is to:
Compute the liabilities associated with benefits likely to be paid on behalf of current retired and non- retired members. Compare assets with accrued liabilities to assess the funded condition. Compute the recommended employers’ contribution for the Fiscal Year beginning July 1, 2016.
The funding objective is stated in Article 4, Chapter 5, Title 38, Section 891A of the Arizona Revised Stat- utes. The valuation should not be relied upon for any other purpose.
The valuation process develops contribution rates that are sufficient to fund the plan’s normal cost (i.e., the costs assigned by the valuation method to the year of service about to be rendered), as well as to fund un- funded actuarial accrued liabilities as a level percent of active member payroll over a finite period. The valuations were completed based upon population data, asset data, and plan provisions as of June 30, 2015.
The valuation was based upon information furnished by the plan’s administrative staff concerning Retire- ment Plan benefits, financial transactions, and active members, terminated members, retirees and benefici- aries. We checked the data for internal and year-to-year consistency, but did not otherwise audit the data. As a result, we do not assume responsibility for the accuracy or completeness of the data provided. The ac- tuary summarizes and tabulates population data in order to analyze longer-term trends. The following schedules were prepared by the actuary and provided to the administrative staff to be included in the “Actuarial Section” of the June 30, 2015 CAFR:
Aggregate Actuarial Balance Sheet as of June 30, 2015 Summary of Valuation Assumptions Solvency Test Summary of Active Member Data Summary of Retirees and Inactive Members Schedule of Experience Gain/(Loss) for year ended June 30, 2015
124 Comprehensive Annual Financial Report ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 2
GRS did not prepare any of the schedules included in the “Financial Section” of the June 30, 2015 CAFR. However, we did provide certain pieces of information that were used in that section, such as the Actuarial Accrued Liability and the Actuarial Value of Assets.
Assets are valued on a market related basis. This method recognizes the assumed return fully each year and spreads each year’s gain or loss above or below assumed return over a closed 7-year period. The continuing effect of prior asset losses was dampened by the 7-year smoothing period, and further offset by the effect of lower than assumed pay increases. There remains $33.7 million ($31.6 million for pension and $2.1 million for health) of unrecognized investment losses that will in the absence of other gains, drive the contribution rate up over the next several years.
Actuarial valuations are based upon assumptions regarding future activity in specific risk areas including the rates of investment return and payroll growth, eligibility for the various classes of benefits, and longev- ity among retired lives. The Board of Trustees adopts these assumptions after considering the advice of the actuary and other professionals. The assumptions and the methods comply with the requirements of State- ment No. 67 of the Governmental Accounting Standards Board. Each actuarial valuation takes into account all prior differences between actual and assumed experience in each risk area and adjusts the contribution rates as needed. The June 30, 2015 valuations were based upon assumptions that were recommended in connection with a study of experience covering the 2006-2011 period. Future actuarial measurements may differ significantly from those presented in the valuations due to such factors as experience differing from that anticipated by the actuarial assumptions, changes in plan provisions, changes in actuarial assumptions or methods, or changes in applicable law.
Based upon the results of the June 30, 2015 valuations, the retired lives are less than fully funded on a fund- ing value of assets basis and market value of assets basis. They are much less than fully funded based upon the market value of assets. It is most important that this plan receive contributions at least equal to the actu- arial rates.
In order to gain a full understanding of the actuarial condition of the plan, it is important to read the full ac- tuarial report that we have provided to the Plan.
Comprehensive Annual Financial Report 125 ACTUARIAL SECTION
The Board of Trustees October 29, 2015 Page 3
Mark Buis and James D. Anderson are Members of the American Academy of Actuaries (MAAA), and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein.
Respectfully submitted,
Mark Buis, FSA, EA, FCA, MAAA
James D. Anderson, FSA, MAAA
MB/JDA:sc
126 Comprehensive Annual Financial Report ACTUARIAL SECTION
CORP AGGREGATE ACTUARIAL BALANCE SHEET YEAR ENDED JUNE 30, 2015
HEALTH ACTUARIAL ASSETS PENSION INSURANCE TOTAL
ACCRUED ASSETS Member Accumulated Contributions 406,641,355 0 406,641,355 Employer and Benefit Payment Reserves 1,133,226,765 109,237,632 1,242,464,397 Funding Value Adjustment 31,562,408 2,108,257 33,670,665 Total Accrued Assets 1,571,430,528 111,345,889 1,682,776,417
PROSPECTIVE ASSETS Member Contributions 343,095,442 0 343,095,442 Employer Normal Costs 251,017,292 11,893,806 262,911,098 Employer Unfunded Actuarial Accrued Liability 1,168,805,855 (10,474,737) 1,158,331,118 Total Prospective Assets 1,762,918,589 1,419,069 1,764,337,658
Total Actuarial Assets 3,334,349,117 112,764,958 3,447,114,075
ACTUARIAL PRESENT VALUES (LIABILITY)
PENSIONS IN PAYMENT STATUS Pensions in payment status 1,351,258,733 36,787,041 1,388,045,774
PROSPECTIVE PAYMENTS Retirement Payments 1,900,781,144 0 1,900,781,144 Health Insurance Payments 0 75,977,917 75,977,917 Member Contribution Refunds 82,309,240 0 82,309,240 Pension Increase Reserve 0 0 0 Total Prospective Payments 1,983,090,384 75,977,917 2,059,068,301
Total Actuarial Present Values (Liabilities) 3,334,349,117 112,764,958 3,447,114,075
Comprehensive Annual Financial Report 127 ACTUARIAL SECTION
CORP SUMMARY OF VALUATION ASSUMPTIONS
ECONOMIC ASSUMPTIONS ACTIVE MEMBERS MORTALITY TABLE Interest Rate: 7.85% (net of expenses) Sample rates of mortality for death‐in‐service set forward Salary Increases: 4.00% for inflation 0 years for both males and females. This assumption was first used for the FY2012 valuation of HEALTHY MORTALITY TABLE the System. RP2000 Health Annuitant Mortality Table adjusted by 105% for both males and females. This assumption was Active members are eligible to retire normally at any age first used for the FY2012 valuation of the System. with 20 years of service (25 years for dispatchers), at age 62 with 10 years of service, or when a combination of age DISABLED MORTALITY TABLES and credited service is equal to or greater than 80 years. RP2000 Health Annuitant Mortality Table set forward 10 years for both males and females. This assumption was These rates adopted by the Board of Trustees, as recom‐ first used for the FY2012 valuation of the System. mended by the Plan’s actuary, were first used for the June 30, 2007 valuation.
MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES AND LIFE EXPECTANCY MORTALITY RATES HEALTHY MORTALITY HEALTHY MORTALITY ACTIVE MEMBERS
PROBABILITY OF FUTURE LIFE PROBABILITY OF FUTURE LIFE PROBABILITY OF DYING NEXT YEAR SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) SAMPLE DYING NEXT YEAR EXPECTANCY (YEARS) AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN MEN WOMEN AGES MEN WOMEN 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 31.88 33.93 50 0.16% 0.13% 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 27.19 29.20 55 0.27% 0.24% 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 22.67 24.66 60 0.53% 0.47% 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 18.43 20.39 65 1.03% 0.90% 70 1.77% 1.55% 14.56 16.49 70 1.77% 1.55% 14.56 16.49 75 3.06% 2.49% 11.04 12.95 75 3.06% 2.49% 11.04 12.95 80 5.54% 4.13% 8.00 9.80 80 5.54% 4.13% 8.00 9.80
128 Comprehensive Annual Financial Report ACTUARIAL SECTION
CORP MISCELLANEOUS AND TECHNICAL ASSUMPTIONS
MARRIAGE ASSUMPTION NORMAL FORM OF BENEFIT 80% of males and females are assumed to be married for A straight life payment is the assumed normal form of purposes of death‐in‐service benefits. Male spouses are benefit for members who are not married, and the 80% assumed to be three years older than female spouses for Joint and Survivor form of payment with no reduction, for active member valuation purposes. married members. 80% of members are assumed to be married at time of retirement. PAY INCREASE TIMING Six months after the valuation date. BENEFIT SERVICE Exact fractional service is used to determine the amount of DECREMENT TIMING benefit payable. Decrements of all types are assumed to occur mid‐year. NORMAL COST PERCENTAGE ELIGIBILITY TESTING For the purposes of calculating the Normal Cost as a per‐ Eligibility for benefits is determined based upon the age cent of payroll under the Projected Unit Credit Cost nearest birthday and service nearest whole year on the Method, the Normal Cost was projected with interest to the date the decrement is assumed to occur. applicable Fiscal Year and divided by the Payroll projected with wage base to the applicable Fiscal Year. DECREMENT RELATIVITY Decrement rates are used directly from the experience HEALTH CARE UTILIZATION study, without adjustment for multiple decrement table 70% of future retirees are expected to utilize health care. effects. 80% of those are assumed to be married.
DECREMENT OPERATION FUTURE COST OF LIVING INCREASES Disability and turnover decrements do not operate during Future cost of living increases are not reflected in the li‐ retirement eligibility. abilities. The 2012 Experience Study recommended reduc‐ ing the expected rate of return by approximately 0.5% to SERVICE CREDIT ACCRUALS account for this contingency. It is assumed that members accrue one year of service credit per year.
INCIDENCE OF CONTRIBUTIONS Contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made.
Comprehensive Annual Financial Report 129 ACTUARIAL SECTION
CORP SUMMARY OF ACTIVE MEMBER DATA
AGE AND SERVICE DISTRIBUTION Listed below is a summary of Active Members by age group, years of service and annual compensation. The summary points out that there were 14,184 active members in the Plan as of June 30, 2015, decreased from 14,595 for the prior year.
YEARS OF SERVICE TO VALUATION DATE TOTALS AVG. AGE 0-4 5-9 10-14 15-19 20-24 25-29 30+ NO. SALARY < 24 1,056 9 1,065 35,375 25-29 2,019 360 8 2,387 37,092 30-34 1,025 839 271 2 2,137 40,645 35-39 580 565 548 168 1,861 44,280 40-44 465 496 473 535 41 2,010 46,427 45-49 318 381 378 375 193 27 1,672 48,137 50-54 229 262 277 277 131 98 2 1,276 47,943 55-59 151 173 235 233 99 63 22 976 48,529 60-64 79 123 152 132 52 39 13 590 47,970 65+ 18 57 56 36 20 15 8 210 48,320 Total 5,940 3,265 2,398 1,758 536 242 45 14,184 43,448
COMPARATIVE SCHEDULE
YEAR ENDED ACTIVE PAYROLL AGE SERVICE AVERAGE INCREASE IN JUNE 30, MEMBERS +000 (YEARS) (YEARS) SALARY AVG. PAY 2006 11,914 437,744 39.3 6.2 36,742 6.80% 2007 12,780 515,428 39.0 6.0 40,331 9.80% 2008 14,716 642,621 39.6 7.0 43,668 8.30% 2009 14,580 630,825 40.2 7.4 43,266 -0.90% 2010 14,319 616,481 40.3 7.8 43,053 -0.50% 2011 14,565 609,243 40.1 7.7 41,829 -2.80% 2012 14,991 626,223 39.8 7.7 41,773 -0.10% 2013 14,580 604,068 39.7 8.0 41,431 -0.80% 2014 14,595 625,264 39.6 8.1 42,841 3.40% 2015 14,184 616,267 39.5 8.3 43,448 1.40%
130 Comprehensive Annual Financial Report ACTUARIAL SECTION
CORP SUMMARY OF INACTIVE MEMBER DATA
As of June 30, 2015, there were 2,318 inactive members in SUMMARY OF INACTIVE MEMBERS the Plan who had not withdrawn their accumulated mem‐ FOR THE YEAR ENDED JUNE 30, 2015 ber contributions. They are broken down by attained age YEARS OF SERVICE TO VALUATION DATE ATTAINED and years of service as follows: AGE 0-4 5-9 10-14 15-19 20+ TOTAL < 30 687 32 719 30-39 559 115 28 3 705 40-44 195 36 26 4 261 45-49 149 26 20 3 198 50-54 108 18 22 9 1 158 55-59 75 25 34 10 1 145 60-69 68 11 35 12 126 70+ 3 1 1 1 6 Total 1,844 264 165 42 3 2,318
CORP SUMMARY OF RETIRED MEMBER DATA
CORP RETIRANTS AND BENEFICIARIES NUMBER ANNUAL ANNUAL REMOVED NUMBER ALLOWANCES ALLOWANCES YEAR ENDED FROM ADDED REMOVED ADDED TO ANNUAL PERCENT AVERAGE JUNE 30, ROLES TO ROLES TOTALS FROM ROLES ROLES PENSIONS INCREASE PENSION 2006 46 232 1,919 2,405,616 4,807,848 37,272,180 19.0% 19,065 2007 68 272 2,123 971,820 6,365,640 42,666,000 14.0% 20,097 2008 100 405 2,428 2,197,553 10,594,200 51,062,647 19.7% 21,031 2009 118 281 2,591 1,532,671 9,559,615 59,089,591 15.7% 22,806 2010 52 369 2,908 850,373 11,529,838 69,769,056 18.1% 23,992 2011 48 396 3,256 880,983 12,749,577 81,637,650 17.0% 25,073 2012 64 284 3,476 1,078,072 7,358,770 87,918,348 7.7% 25,293 2013 69 403 3,810 1,418,636 9,965,863 96,465,575 9.7% 25,319 2014 56 336 4,090 1,070,772 12,167,340 107,562,143 11.5% 26,299 2015 69 389 4,410 1,498,665 10,153,781 116,217,259 8.0% 26,353
Comprehensive Annual Financial Report 131 ACTUARIAL SECTION
SOLVENCY TEST
Testing the financial solvency of a retirement plan can be In a plan that has been following the discipline of level per‐ done in several ways. The funding objective is to meet cent of payroll financing, the liabilities for active member long‐term benefit promises through contributions that contributions on deposit (liability 1) and the liabilities for remain approximately level from year to year as a percent future benefits to present retired lives (liability 2) will be of member payroll. If the contributions to the plan are fully covered by present assets (except in rare circum‐ level in concept and soundly executed, and if the plan con‐ stances). In addition, the liabilities for service already ren‐ tinues its present operations pattern for the indefinite fu‐ dered by active members (liability 3) will be partially cov‐ ture, the plan will pay all promised benefits when due ‐ the ered by the remainder of present assets. Generally, if the ultimate test of financial soundness. plan has been using level cost financing, the funded por‐ tion of liability 3 will increase over time. Liability 3 being A short term solvency test is one means of checking a fully funded is very rare. All amounts presented are in plan's progress under its funding program. In a short term thousands. solvency test, the plan's present assets (cash and invest‐ ments) are compared with: 1. Active member contributions on deposit. 2. The liabilities for future benefits to present re tired lives. 3. The liabilities for service already rendered by active members.
PSPRS AGGREGATE ACCRUED LIABILITIES VALUATION PORTION OF ACCRUED ACTIVE RETIRANTS ACTIVE ASSETS LIABILITIES COVERED BY MEMBER AND MEMBERS AVAILABLE NET ASSETS AVAILABLE CONT. BENEFICIARIES (ER PORTION) FOR BENEFITS FOR BENEFITS YEAR ENDED JUNE 30, $ (1) $ (2) $ (3) $ (2) (1) (2) (3) 2006 698,025 2,743,387 3,053,601 4,999,911 100.00% 100.00% 51.00% 2007 730,929 3,183,931 3,353,431 4,829,521 100.00% 100.00% 27.30% 2008 789,566 3,418,835 3,454,378 5,095,645 100.00% 100.00% 25.70% 2009 737,839 4,622,427 2,629,185 5,445,497 100.00% 100.00% 3.20% 2010 808,207 4,993,382 2,690,233 5,591,304 100.00% 96.00% 0.00% 2011 819,996 5,790,724 2,754,541 5,795,945 100.00% 86.00% 0.00% 2012 897,597 6,364,273 3,063,659 6,051,595 100.00% 81.00% 0.00% 2013 978,017 6,652,270 3,193,253 6,185,074 100.00% 78.00% 0.00% 2014 1,058,474 7,949,695 3,224,848 6,018,984 100.00% 62.40% 0.00% 2015 1,295,884 8,326,599 3,063,317 6,217,787 100.00% 59.10% 0.00%
EORP AGGREGATE ACCRUED LIABILITIES VALUATION PORTION OF ACCRUED ACTIVE RETIRANTS ACTIVE ASSETS LIABILITIES COVERED BY MEMBER AND MEMBERS AVAILABLE NET ASSETS AVAILABLE CONT. BENEFICIARIES (ER PORTION) FOR BENEFITS FOR BENEFITS YEAR ENDED JUNE 30, $ (1) $ (2) $ (3) $ (2) (1) (2) (3) 2006 36,639 248,357 106,407 351,701 100.00% 100.00% 62.30% 2007 39,760 277,278 134,261 336,717 100.00% 100.00% 14.70% 2008 41,964 285,634 126,743 348,013 100.00% 100.00% 16.10% 2009 40,924 324,200 141,067 360,950 100.00% 99.00% 0.00% 2010 43,283 349,417 143,071 357,342 100.00% 90.00% 0.00% 2011 42,171 393,830 154,321 366,429 100.00% 82.00% 0.00% 2012 47,274 400,005 162,949 356,346 100.00% 77.00% 0.00% 2013 47,351 431,511 153,675 350,885 100.00% 70.00% 0.00% 2014 54,318 576,015 165,913 313,382 100.00% 45.00% 0.00% 2015 56,387 601,711 155,353 315,387 100.00% 43.00% 0.00%
132 Comprehensive Annual Financial Report ACTUARIAL SECTION
CORP AGGREGATE ACCRUED LIABILITIES VALUATION PORTION OF ACCRUED ACTIVE RETIRANTS ACTIVE ASSETS LIABILITIES COVERED BY MEMBER AND MEMBERS AVAILABLE NET ASSETS AVAILABLE CONT. BENEFICIARIES (ER PORTION) FOR BENEFITS FOR BENEFITS YEAR ENDED JUNE 30, $ (1) $ (2) $ (3) $ (2) (1) (2) (3) 2006 193,819 384,513 402,876 919,868 100.00% 100.00% 84.80% 2007 213,688 430,172 466,941 940,126 100.00% 100.00% 63.40% 2008 296,317 504,462 589,584 1,027,026 100.00% 100.00% 68.90% 2009 314,100 586,596 683,597 1,309,124 100.00% 100.00% 59.70% 2010 345,122 689,910 686,973 1,382,144 100.00% 100.00% 50.50% 2011 353,892 823,664 831,013 1,466,750 100.00% 100.00% 34.80% 2012 373,726 918,771 939,047 1,512,989 100.00% 100.00% 23.50% 2013 382,417 1,011,478 936,343 1,559,583 100.00% 100.00% 17.70% 2014 396,381 1,269,515 971,649 1,511,212 100.00% 87.82% 0.00% 2015 406,641 1,351,259 982,336 1,571,431 100.00% 86.20% 0.00%
See Schedule of Funding Progress in the Required Supplementary Information.
EXPERIENCE GAIN (LOSS)
EXPERIENCE GAIN (LOSS) YEAR ENDED JUNE 30, 2015 (IN THOUSANDS) PSPRS EORP CORP (1) UAAL* at start of year 6,214,033 482,864 1,126,334 (2) Normal cost for year 286,323 15,595 93,510 (3) Funding Method Contribution 612,890 38,464 135,487 (4) Interest accrued on (1), (2) and (3) 474,984 37,007 86,770 (5) Expected UAAL before changes [(1)+(2)-(3)+(4)] 6,362,450 497,002 1,171,126 (6) Changes from benefit increases (2,345) 6,975 0 (7) Change in Reserve for future pension increases 0 (7,256) 0 (8) Expected UAAL after changes: (5)+(6)+(7) 6,360,105 496,722 1,171,126 (9) Actual UAAL at end of year 6,468,014 498,063 1,168,806 (10) Experience Gain (Loss): (8)-(9) (107,909) (1,341) 2,320
Comprehensive Annual Financial Report 133 ACTUARIAL SECTION
THIS PAGE INTENTIONALLY BLANK
134 Comprehensive Annual Financial Report STATISTICAL SECTION STATISTICAL SECTION
SUMMARY The Statistical Section provides additional historical per‐ spective, context, and detail to assist the reader in using the information in the financial statements, notes to the financial statements and required supplemental informa‐ tion to understand and assess the economic condition of PSPRS.
Financial trend information is intended to assist users in understanding and assessing the changes in the financial position over time. Schedules and charts presenting finan‐ cial trend information are Schedule of Changes in Net Posi‐ tion, Schedule of Revenue by Source, Schedule of Expenses by Type, Deductions from Net Position for Benefits and Refunds by Type, Valuation Assets vs. Pension Liabilities, and Contribution Rates.
Operating information is intended to provide contextual information about the operations and resources of PSPRS to assist readers in using financial statement information to understand and assess the economic condition. Sched‐ ules and charts presenting operating information are Membership in the Retirement System*, Principal Partici‐ pating Employers, Benefit Recipients by Location, Sum‐ mary of the Growth of the System, Benefits Payable*, Aver‐ age Monthly Benefit Amounts*, Summary of Benefit In‐ creases*, Schedule of Changes in Employers' Reserve Bal‐ ances, Schedule of Changes in Refundable Member Reserve Balances, Schedule of Employers' Earnings Distribution, and Participating Employers.
Schedules and information are derived from PSPRS inter‐ nal sources unless otherwise indicated. * Schedules and data are provided by actuarial consultant Gabriel, Roeder & Smith.
136 Comprehensive Annual Financial Report STATISTICAL SECTION
FINANCIAL TRENDS
CHANGES IN NET PLAN POSITION LAST 10 FISCAL YEARS - PENSION ALL PLANS COMBINED (IN THOUSANDS)
2015 2014 2013 2012 2011 ADDITIONS Member Contributions 214,951 201,741 185,713 171,472 154,870 Employer Contributions 546,712 507,939 435,122 354,881 311,079 Non-Employer Contribution 5,000 5,000 0 0 0 Court Fees 8,286 8,541 8,412 8,880 9,896 Net Investment Gain (Loss) 282,446 945,182 677,204 (76,947) 986,460 Member Service Purchase 11,865 11,474 7,873 15,247 23,165 Transfers IN 570 1,171 947 1,057 794 Total Additions (Reductions) 1,069,830 1,681,048 1,315,271 474,590 1,486,264 DEDUCTIONS Pension & Insurance Benefits 835,974 773,174 693,007 638,679 637,012 Refunds To Terminated Members 42,460 45,037 44,123 38,211 37,121 Administrative Expenses 7,063 7,580 6,671 6,361 6,285 Transfers OUT 747 574 1,392 1,045 1,266 Total Deductions 886,244 826,365 745,193 684,296 681,684
NET INCREASE (DECREASE) 183,587 854,683 570,078 (209,706) 804,580
NET POSITION HELD IN TRUST Beginning of Fiscal Year, July 1 7,747,043 6,892,360 6,322,282 6,531,988 5,727,408 GASB 67 and Prior Year Adjustment (6,355) 0 0 0 0 End of Fiscal Year, June 30 7,924,274 7,747,043 6,892,360 6,322,282 6,531,988
2010 2009 2008 2007 2006 ADDITIONS Member Contributions 161,234 158,719 212,611 130,075 116,561 Employer Contributions 338,429 365,800 364,473 198,993 149,193 Non-Employer Contribution 0 0 0 0 0 Court Fees 9,538 8,000 4,155 3,978 3,855 Net Investment Gain (Loss) 687,789 (1,106,644) (481,657) 978,805 451,636 Member Service Purchase 12,229 8,432 11,399 12,047 12,833 Transfers IN 1,343 1,219 5,486 3,286 4,062 Total Additions (Reductions) 1,210,562 (564,474) 116,467 1,327,184 738,140 DEDUCTIONS Pension & Insurance Benefits 570,409 534,002 498,965 507,770 335,680 Refunds To Terminated Members 29,876 22,654 24,160 25,471 22,974 Administrative Expenses 6,092 5,938 8,708 5,043 3,902 Transfers OUT 829 561 1,012 2,204 1,856 Total Deductions 607,206 563,155 532,845 540,488 364,412
NET INCREASE (DECREASE) 603,356 (1,127,629) (416,378) 786,696 373,728
NET POSITION HELD IN TRUST Beginning of Fiscal Year, July 1 5,124,052 6,251,681 6,668,059 5,881,363 5,507,635 End of Fiscal Year, June 30 5,727,408 5,124,052 6,251,681 6,668,059 5,881,363
Comprehensive Annual Financial Report 137 STATISTICAL SECTION
FINANCIAL TRENDS
CHANGES IN NET PLAN POSITION LAST 10 FISCAL YEARS - HEALTH INSURANCE ALL PLANS COMBINED (IN THOUSANDS)
2015 2014 2013 2012 2011 ADDITIONS Health Insurance Contributions 29,068 27,296 28,946 27,901 25,416 Net Investment Gain (Loss) 15,428 48,084 33,783 (2,439) 44,291 Total Additions (Reductions) 44,465 75,380 62,729 25,462 69,707 DEDUCTIONS Pension & Insurance Benefits 18,591 17,567 17,114 17,336 17,026 Administrative Expenses 385 0 0 0 0 Total Deductions 18,976 17,567 17,114 17,336 17,026
NET INCREASE (DECREASE) 25,520 57,813 45,615 8,126 52,681
NET POSITION HELD IN TRUST Beginning of Fiscal Year, July 1 415,024 357,211 311,596 303,470 250,789 End of Fiscal Year, June 30 440,544 415,024 357,211 311,596 303,470
2010 2009 2008 2007 2006 ADDITIONS Health Insurance Contributions 26,402 29,097 28,000 10,148 9,679 Net Investment Gain (Loss) 29,139 (43,995) (18,452) 36,168 16,483 Total Additions (Reductions) 55,541 (14,898) 9,548 46,316 26,162 DEDUCTIONS Pension & Insurance Benefits 15,751 15,356 14,809 13,773 12,966 Administrative Expenses 0 0 0 0 0 Total Deductions 15,751 15,356 14,809 13,773 12,966
NET INCREASE (DECREASE) 39,790 (30,254) (5,261) 32,543 13,196
NET POSITION HELD IN TRUST Beginning of Fiscal Year, July 1 210,999 241,253 246,514 213,971 200,775 End of Fiscal Year, June 30 250,789 210,999 241,253 246,514 213,971
138 Comprehensive Annual Financial Report STATISTICAL SECTION
FINANCIAL TRENDS
SCHEDULE OF REVENUE BY SOURCE - PSPRS LAST TEN FISCAL YEARS (Includes Health Insurance Subsidy)
YEAR FIRE HEALTH % OF INVESTMENT TRANSFER ENDING MEMBER EMPLOYER INSURANCE COURT INSURANCE COVERED INCOME FROM OTHER JUNE 30, CONTRIB CONTRIB PREMIUM TAX FEES CONTRIB PAYROLL (LOSS) PLANS TOTAL
2006 75,616,322 115,491,713 5,656,848 0 6,070,125 12.80% 379,512,079 10,533,585 592,880,672 2007 84,629,709 159,962,241 11,305,571 0 6,319,694 13.83% 815,524,366 10,799,442 1,088,541,023 2008 97,156,897 188,953,757 12,306,704 0 20,472,131 16.52% (411,505,523) 11,179,532 (81,436,502) 2009 101,183,586 281,528,862 24,720,792 0 22,186,655 21.71% (872,798,642) 8,209,996 (434,968,751) 2010 102,141,540 268,910,398 11,920,934 0 19,875,793 20.77% 553,076,513 11,366,583 967,291,761 2011 99,262,271 256,525,004 12,022,353 0 17,299,140 20.89% 789,263,727 21,240,375 1,195,612,870 2012 112,645,371 279,547,069 12,187,512 0 19,094,922 22.68% (41,661,350) 14,275,143 396,088,667 2013 127,362,618 347,630,728 12,828,065 0 20,394,283 27.18% 541,980,088 7,575,490 1,057,771,272 2014 141,066,081 399,705,875 14,139,739 0 19,534,206 30.44% 757,180,984 11,731,942 1,343,358,827 2015 154,359,120 434,962,028 13,135,529 0 21,480,853 32.54% 227,096,052 10,797,538 861,831,120
SCHEDULE OF REVENUE BY SOURCE - EORP LAST TEN FISCAL YEARS (Includes Health Insurance Subsidy)
YEAR EMPLOYER FIRE HEALTH % OF INVESTMENT TRANSFER ENDING MEMBER NON-EMPLOYER INSURANCE COURT INSURANCE COVERED INCOME FROM OTHER JUNE 30, CONTRIB CONTRIB PREMIUM TAX FEES CONTRIB PAYROLL (LOSS) PLANS TOTAL
2006 3,811,179 6,700,757 0 3,855,007 924,203 20.54% 24,408,222 4,133,169 43,832,537 2007 4,089,699 5,975,979 0 3,977,740 955,111 18.55% 54,598,524 3,147,915 72,744,968 2008 4,355,999 6,808,557 0 4,155,348 1,379,146 20.21% (23,150,918) 1,618,535 (4,833,333) 2009 4,436,652 9,172,918 0 8,000,231 1,273,229 28.00% (61,526,963) 660,650 (37,983,283) 2010 4,611,179 8,444,229 0 9,538,094 1,243,514 26.25% 34,583,592 930,727 59,351,335 2011 4,716,681 10,865,962 0 9,895,857 1,180,768 29.79% 48,274,987 1,699,788 76,634,043 2012 6,858,675 11,627,462 0 8,880,308 1,232,862 32.99% (2,641,096) 809,474 26,767,685 2013 7,700,666 13,567,248 0 8,411,739 1,208,405 36.44% 30,737,247 245,084 61,870,389 2014 8,938,401 21,304,591 0 8,540,583 1,072,197 23.50% 41,567,954 149,656 81,573,382 2015 8,471,736 21,038,061 0 8,285,993 0 23.50% 11,878,472 667,914 50,342,176
SCHEDULE OF REVENUE BY SOURCE - CORP LAST TEN FISCAL YEARS (Includes Health Insurance Subsidy) YEAR FIRE HEALTH % OF INVESTMENT TRANSFER ENDING MEMBER EMPLOYER INSURANCE COURT INSURANCE COVERED INCOME FROM OTHER JUNE 30, CONTRIB CONTRIB PREMIUM TAX FEES CONTRIB PAYROLL (LOSS) PLANS TOTAL
2006 37,134,076 21,343,413 0 0 2,684,637 5.47% 64,197,983 2,228,116 127,588,225 2007 41,354,907 21,749,008 0 0 2,873,685 4.46% 144,850,095 1,386,706 212,214,401 2008 111,097,660 144,581,325 0 0 6,147,893 6.72% (68,039,675) 4,087,988 197,875,191 2009 53,098,136 50,378,712 0 0 5,636,426 8.65% (216,313,556) 781,196 (106,419,086) 2010 54,480,961 49,154,582 0 0 5,282,496 7.49% 129,267,190 1,276,087 239,461,316 2011 50,891,168 45,067,749 0 0 6,934,982 8.57% 193,212,289 1,018,286 297,124,474 2012 51,967,894 51,524,317 0 0 7,568,087 9.50% (10,340,020) 1,219,350 101,939,628 2013 50,648,775 61,106,590 0 0 7,334,225 11.31% 138,267,533 999,077 258,356,200 2014 51,736,766 77,797,924 0 0 6,681,242 13.68% 194,516,872 762,860 331,495,664 2015 52,119,508 82,577,422 0 0 7,587,137 14.46% 58,899,657 969,628 202,153,352
Comprehensive Annual Financial Report 139 STATISTICAL SECTION
FINANCIAL TRENDS
SCHEDULE OF BENEFITS BY TYPE - PSPRS LAST TEN FISCAL YEARS
YEAR HEALTH TRANSFER ENDING INSURANCE ADMIN. TO OTHER JUNE 30, BENEFITS SUBSIDY EXPENSES REFUNDS PLANS TOTAL
2006 273,823,722 10,203,920 2,979,511 7,225,720 291,161 294,524,034 2007 439,336,159 11,009,305 3,971,338 8,708,528 120,511 463,145,841 2008 418,384,355 11,824,417 4,661,877 7,884,695 144,622 442,899,966 2009 444,352,210 12,214,037 4,352,207 7,643,202 49,169 468,610,825 2010 469,481,695 12,496,923 4,932,349 9,975,440 243,073 497,129,480 2011 534,386,731 13,400,890 4,776,388 11,976,416 292,996 564,833,421 2012 507,182,015 13,513,216 4,890,364 12,376,688 81,362 538,043,645 2013 552,720,457 13,383,444 5,104,446 12,819,713 514,209 584,542,269 2014 612,104,805 13,578,195 5,826,248 14,434,714 50,478 645,994,440 2015 665,138,192 14,242,153 5,655,658 13,897,612 23,119 698,956,734
SCHEDULE OF BENEFITS BY TYPE - EORP LAST TEN FISCAL YEARS
YEAR HEALTH TRANSFER ENDING INSURANCE ADMIN. TO OTHER JUNE 30, BENEFITS SUBSIDY EXPENSES REFUNDS PLANS TOTAL
2006 27,005,830 903,104 247,594 7,246 11,093 28,174,867 2007 28,717,546 850,915 339,875 127,738 20,169 30,056,243 2008 31,607,055 911,923 355,290 63,958 3,834 32,942,060 2009 34,178,410 917,286 521,507 131,663 0 35,748,866 2010 36,884,844 884,225 245,127 126,426 0 38,140,622 2011 39,665,718 926,378 324,343 216,689 28,071 41,161,199 2012 43,536,995 914,968 287,772 89,631 0 44,829,366 2013 45,472,356 901,360 299,692 123,773 36,682 46,833,863 2014 53,984,038 950,531 315,896 154,933 23,581 55,428,979 2015 54,453,000 956,773 319,124 173,427 0 55,902,324
SCHEDULE OF BENEFITS BY TYPE - CORP LAST TEN FISCAL YEARS
YEAR HEALTH TRANSFER ENDING INSURANCE ADMIN. TO OTHER JUNE 30, BENEFITS SUBSIDY EXPENSES REFUNDS PLANS TOTAL
2006 34,849,946 1,858,582 674,058 15,741,460 1,555,240 54,679,286 2007 39,716,871 1,913,186 732,236 16,634,320 2,062,977 61,059,590 2008 48,972,663 2,073,245 1,102,992 16,211,929 864,053 69,224,882 2009 55,488,889 2,207,889 1,064,825 14,879,342 511,697 74,152,642 2010 64,039,674 2,372,104 915,378 19,774,873 586,100 87,688,129 2011 76,359,270 2,699,129 1,184,756 24,927,660 945,170 106,115,985 2012 87,977,793 2,890,441 1,182,692 25,743,514 964,033 118,758,473 2013 94,813,343 2,829,735 1,266,690 31,179,499 840,629 130,929,896 2014 107,086,812 3,037,563 1,437,691 30,446,708 498,689 142,507,463 2015 116,382,685 3,391,969 1,473,280 28,388,926 723,994 150,360,854
140 Comprehensive Annual Financial Report STATISTICAL SECTION
FINANCIAL TRENDS
PSPRS 800,000,000 LUMP SUM SURVIVORS DISABILITY HEALTH INS RETIREMENTS
700,000,000
600,000,000
500,000,000
400,000,000
300,000,000
200,000,000
100,000,000
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EORP 60,000,000 LUMP SUM SURVIVORS DISABILITY HEALTH INS RETIREMENTS
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CORP 160,000,000 LUMP SUM SURVIVORS DISABILITY HEALTH INS RETIREMENTS
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Comprehensive Annual Financial Report 141 STATISTICAL SECTION
FINANCIAL TRENDS
DEDUCTIONS FROM NET POSITION FOR BENEFITS AND REFUNDS BY TYPE - PSPRS LAST TEN FISCAL YEARS
YEAR HEALTH ENDING NORMAL SURVIVOR DISABILITY DEFERRED TOTAL DROP SEPARATION INSURANCE JUNE 30, BENEFITS BENEFITS BENEFITS BENEFITS BENEFITS PROGRAM REFUNDS SUBSIDY
2006 190,350,994 27,991,410 32,501,612 140,587 250,984,603 22,839,120 7,225,720 10,203,920 2007 220,950,477 30,742,748 35,536,324 146,890 287,376,439 151,959,720 8,708,528 11,009,305 2008 247,831,306 33,357,309 39,137,350 151,698 320,477,663 97,907,651 7,884,695 11,824,417 2009 274,965,209 36,380,334 41,979,907 158,494 353,483,944 90,868,266 7,643,202 12,214,037 2010 300,889,208 39,673,066 45,439,760 179,265 386,181,299 83,300,396 9,975,440 12,496,923 2011 328,892,084 43,889,613 49,132,258 199,716 422,113,671 112,273,060 11,976,416 13,400,890 2012 359,668,287 47,630,792 53,214,209 187,449 460,700,737 46,481,278 12,376,688 13,513,216 2013 383,377,255 51,443,297 57,486,396 199,579 492,506,527 60,213,930 12,819,713 13,383,444 2014 408,013,131 56,828,856 62,099,110 193,661 527,134,758 84,970,047 14,434,714 13,578,195 2015 434,918,201 60,353,312 64,842,830 219,581 560,333,924 104,804,268 13,897,612 14,242,153
DEDUCTIONS FROM NET POSITION FOR BENEFITS AND REFUNDS BY TYPE - EORP LAST TEN FISCAL YEARS
YEAR HEALTH ENDING NORMAL SURVIVOR DISABILITY DEFERRED TOTAL DROP SEPARATION INSURANCE JUNE 30, BENEFITS BENEFITS BENEFITS BENEFITS BENEFITS PROGRAM REFUNDS SUBSIDY
2006 21,986,931 3,935,206 1,083,693 0 27,005,830 0 7,246 903,104 2007 23,435,322 4,231,772 1,050,452 0 28,717,546 0 127,738 850,915 2008 25,967,062 4,637,432 1,002,561 0 31,607,055 0 63,958 911,923 2009 28,020,876 5,007,588 1,149,946 0 34,178,410 0 131,663 917,286 2010 30,411,785 5,379,358 1,093,701 0 36,884,844 0 126,426 884,225 2011 32,855,786 5,582,012 1,227,920 0 39,665,718 0 216,689 926,378 2012 36,215,843 6,030,424 1,290,728 0 43,536,995 0 89,631 914,968 2013 37,637,320 6,477,448 1,357,588 0 45,472,356 0 123,773 901,360 2014 44,479,754 7,488,200 1,650,094 0 53,618,049 0 154,933 950,531 2015 45,334,729 7,486,807 1,631,464 0 54,453,000 0 173,427 956,773
DEDUCTIONS FROM NET POSITION FOR BENEFITS AND REFUNDS BY TYPE - CORP LAST TEN FISCAL YEARS
YEAR HEALTH ENDING NORMAL SURVIVOR DISABILITY DEFERRED TOTAL DROP SEPARATION INSURANCE JUNE 30, BENEFITS BENEFITS BENEFITS BENEFITS BENEFITS PROGRAM REFUNDS SUBSIDY
2006 28,928,172 4,472,559 1,449,215 0 34,849,946 0 15,741,460 1,858,582 2007 33,341,839 4,860,093 1,514,939 0 39,716,871 0 16,634,320 1,913,186 2008 39,831,873 5,934,454 1,625,680 0 47,392,007 1,580,656 16,211,929 2,073,245 2009 46,752,709 6,685,021 1,805,702 0 55,243,432 245,457 14,879,342 2,207,889 2010 54,722,001 6,740,427 1,914,842 0 63,377,270 662,404 19,774,873 2,372,104 2011 65,448,261 7,467,220 2,105,741 0 75,021,222 1,338,048 24,927,660 2,699,129 2012 74,822,948 8,602,328 2,259,626 0 85,684,902 2,292,891 25,743,514 2,890,441 2013 81,829,319 9,043,592 2,306,541 0 93,179,451 1,633,892 31,179,499 2,829,735 2014 92,737,553 10,049,794 2,532,583 0 105,319,930 1,766,882 30,446,708 3,037,563 2015 99,213,858 10,407,080 2,692,516 102,637 112,416,091 3,966,594 28,388,926 3,391,969
142 Comprehensive Annual Financial Report STATISTICAL SECTION
FINANCIAL TRENDS
PSPRS PSPRS SCHEDULE OF BENEFITS BY TYPE AND RANGE VALUATION ASSETS vs. PENSION LIABILITIES FISCAL YEAR 2015 INCLUDES HEALTH INSURANCE SUBSIDY LAST TEN FISCAL YEARS MONTHLY BENEFIT NORMAL SURVIVOR DISABILITY TOTAL (IN THOUSANDS) AMOUNT BENEFITS BENEFITS BENEFITS BENEFITS YEAR ENDING VALUATION UNFUNDED ACCRUED FUNDED Under 1,000 20 29 5 54 JUNE 30, ASSETS LIABILITIES LIABILITIES RATIO 1,001-2,000 13 19 54 86 2006 4,999,911 1,495,101 6,495,012 77.0% 2,001-3,000 363 249 242 854 2007 4,829,521 2,438,770 7,268,291 66.4% 3,001-4,000 2,662 806 832 4,300 2008 5,095,645 2,567,134 7,662,779 66.5% 4,001-5,000 2,698 195 292 3,185 2009 5,445,497 2,543,954 7,989,451 68.2% 5,001-6,000 1,323 81 45 1,449 2010 5,591,304 2,900,518 8,491,822 65.8% 6,001-7,000 569 27 31 627 2011 5,795,945 3,569,316 9,365,261 61.9% 7,001-8,000 259 11 10 280 2012 6,051,595 4,273,935 10,325,530 58.6% 8,001-9,000 112 6 3 121 2013 6,185,074 4,638,466 10,823,540 57.1% 9,001-10,000 52 1 1 54 2014 6,313,415 6,206,116 12,519,531 50.4% Over 10,001 22 1 1 24 2015 6,533,140 6,447,071 12,980,211 50.3% Totals 8,093 1,425 1,516 11,034
EORP EORP SCHEDULE OF BENEFITS BY TYPE AND RANGE VALUATION ASSETS vs. PENSION LIABILITIES FISCAL YEAR 2015 INCLUDES HEALTH INSURANCE SUBSIDY LAST TEN FISCAL YEARS MONTHLY BENEFIT NORMAL SURVIVOR DISABILITY TOTAL (IN THOUSANDS) AMOUNT BENEFITS BENEFITS BENEFITS BENEFITS YEAR ENDING VALUATION UNFUNDED ACCRUED FUNDED Under 1,000 192 69 0 261 JUNE 30, ASSETS LIABILITIES LIABILITIES RATIO 1,001-2,000 138 39 1 178 2006 351,701 39,702 391,403 89.9% 2,001-3,000 111 24 1 136 2007 336,717 114,582 451,299 74.6% 3,001-4,000 74 15 2 91 2008 348,013 106,327 454,341 76.6% 4,001-5,000 86 14 0 100 2009 360,950 145,240 506,190 71.3% 5,001-6,000 48 7 0 55 2010 357,342 178,429 535,771 66.7% 6,001-7,000 34 6 0 40 2011 366,429 223,892 590,321 62.1% 7,001-8,000 37 4 1 42 2012 356,346 253,883 610,229 58.4% 8,001-9,000 22 15 4 41 2013 350,885 281,652 632,537 55.5% 9,001-10,000 34 9 1 44 2014 336,495 471,862 808,357 41.6% Over 10,001 117 4 7 128 2015 338,431 487,380 825,811 41.0% Totals 893 206 17 1,116
CORP CORP SCHEDULE OF BENEFITS BY TYPE AND RANGE VALUATION ASSETS vs. PENSION LIABILITIES FISCAL YEAR 2015 INCLUDES HEALTH INSURANCE SUBSIDY LAST TEN FISCAL YEARS MONTHLY BENEFIT NORMAL SURVIVOR DISABILITY TOTAL (IN THOUSANDS) AMOUNT BENEFITS BENEFITS BENEFITS BENEFITS YEAR Under 1,000 286 109 14 409 ENDING VALUATION UNFUNDED ACCRUED FUNDED JUNE 30, ASSETS LIABILITIES LIABILITIES RATIO 1,001-2,000 1,146 392 83 1,621 2006 919,867 61,340 981,207 93.7% 2,001-3,000 1,550 60 30 1,640 2007 940,126 170,675 1,110,801 84.6% 3,001-4,000 469 10 2 481 2008 1,207,026 183,337 1,390,363 86.8% 4,001-5,000 163 4 0 167 2009 1,309,124 275,169 1,584,293 82.6% 5,001-6,000 50 3 0 53 2010 1,382,144 339,862 1,722,006 80.3% 6,001-7,000 24 0 0 24 2011 1,466,750 541,820 2,008,569 73.0% 7,001-8,000 8 0 0 8 2012 1,512,989 718,555 2,231,544 67.8% 8,001-9,000 3 0 0 3 2013 1,559,583 770,655 2,330,238 66.9% 9,001-10,000 1 0 0 1 2014 1,613,312 1,121,248 2,734,560 59.0% Over 10,001 2 0 1 3 2015 1,682,776 1,158,331 2,841,108 59.2% Totals 3,702 578 130 4,410
Comprehensive Annual Financial Report 143 STATISTICAL SECTION
FINANCIAL TRENDS
PSPRS
100.0% FUNDING RATIO (IN THOUSANDS) 90.0% 14,000,000 VALUATION ASSETS UNFUNDED LIABILITIES 77.0% 80.0% 12,000,000 68.2% 66.4% 66.5% 65.8% 70.0% 61.9% 58.6% 57.1% 10,000,000 60.0% 50.4% 50.3% 50.0% 8,000,000
40.0% 6,000,000 30.0% 4,000,000 20.0% 2,000,000 10.0%
0.0% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EORP
100.0% (IN THOUSANDS) 89.9% FUNDING RATIO 90.0% 1,000,000 VALUATION ASSETS UNFUNDED LIABILITIES 76.6% 80.0% 74.6% 900,000 71.3% 66.7% 800,000 70.0% 62.1% 58.4% 55.5% 700,000 60.0% 600,000 50.0% 41.6% 41.0% 500,000 40.0% 400,000 30.0% 300,000
20.0% 200,000
10.0% 100,000
0.0% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CORP (IN THOUSANDS) 100.0% 93.7% FUNDING RATIO 86.8% 90.0% 84.6% 3,200,000 VALUATION ASSETS UNFUNDED LIABILITIES 82.6% 80.3% 80.0% 2,800,000 73.0% 67.8% 66.9% 70.0% 2,400,000 59.0% 59.2% 60.0% 2,000,000 50.0% 1,600,000 40.0% 1,200,000 30.0% 800,000 20.0%
10.0% 400,000
0.0% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
144 Comprehensive Annual Financial Report STATISTICAL SECTION
FINANCIAL TRENDS
PSPRS 40.00% CONTRIBUTION RATES EMPLOYEE RATE EMPLOYER RATE LAST TEN FISCAL YEARS 35.00% YEAR AVERAGE ENDING EMPLOYER EMPLOYEE JUNE 30, RATE RATE 30.00%
2006 12.80% 7.65% 25.00% 2007 13.83% 7.65% 2008 16.52% 7.65% 20.00% 2009 21.71% 7.65% 15.00% 2010 20.77% 7.65% 2011 20.89% 7.65% 10.00% 2012 22.68% 8.65% 5.00% 2013 27.18% 9.55% 2014 30.44% 10.35% 0.00% 2015 32.54% 11.05% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EORP 40.00% CONTRIBUTION RATES EMPLOYEE RATE EMPLOYER RATE LAST TEN FISCAL YEARS 35.00% YEAR AVERAGE ENDING EMPLOYER EMPLOYEE JUNE 30, RATE RATE 30.00%
2006 20.54% 7.00% 25.00% 2007 18.55% 7.00% 2008 20.21% 7.00% 20.00% 2009 28.00% 7.00% 15.00% 2010 26.25% 7.00% 2011 29.79% 7.00% 10.00% 2012 32.99% 10.00% 5.00% 2013 36.44% 11.50% 2014 23.50% 13.00% 0.00% 2015 23.50% 13.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CORP 20.00% CONTRIBUTION RATES EMPLOYEE RATE EMPLOYER RATE LAST TEN FISCAL YEARS YEAR AVERAGE ENDING EMPLOYER EMPLOYEE 15.00% JUNE 30, RATE RATE 2006 5.47% 8.50% 2007 4.46% 7.96% 2008 6.72% 7.93% 10.00% 2009 8.65% 7.96% 2010 7.49% 7.96% 2011 8.57% 7.96% 5.00% 2012 9.50% 8.41% 2013 11.31% 8.41%
2014 13.68% 8.41% 0.00% 2015 14.46% 8.41% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Comprehensive Annual Financial Report 145 STATISTICAL SECTION
OPERATING INFORMATION
DISTRIBUTION OF BENEFIT RECIPIENTS BY LOCATION ALL PLANS COMBINED
MEMBERSHIP IN RETIREMENT SYSTEM 60,000 ALL PLANS COMBINED VESTED DROP RETIRED ACTIVE LAST TEN FISCAL YEARS 55,000 YEAR BENE- TERMI- 50,000 ENDING FICIARY NATED 45,000 JUNE 30, ACTIVE RETIRED DROP VESTED TOTAL 40,000 2006 30,038 9,726 1,746 540 42,050 35,000 2007 32,217 10,582 1,325 531 44,655 30,000 2008 35,452 11,541 1,181 574 48,748 25,000 2009 35,304 12,105 1,044 2,740 51,193 20,000 2010 34,614 12,783 1,093 2,853 51,343 15,000 2011 34,048 13,768 1,419 2,503 51,738 10,000 2012 34,378 14,270 1,496 2,497 52,641 5,000 2013 33,855 15,026 1,482 3,065 53,428 0 2014 33,964 15,667 1,559 3,410 54,600 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 33,331 16,560 1,675 4,412 55,978
PRINCIPAL PARTICIPATING EMPLOYERS COMPARISON ALL PLANS COMBINED 2015 2006 COVERED % OF COVERED % OF EMPLOYER EMPLOYEES RANK MEMBERSHIP EMPLOYEES RANK MEMBERSHIP STATE 9,993 1 29.98% 10,030 1 33.23% MARICOPA COUNTY 4,044 2 12.13% 2,956 3 9.79% CITY OF PHOENIX 3,737 3 11.21% 4,078 2 13.51% CITY OF TUCSON 1,370 4 4.11% 1,379 5 4.57% PIMA COUNTY 1,349 5 4.05% 1,042 7 3.45% CITY OF MESA 1,136 6 3.41% 1,103 6 3.65% CITY OF SCOTTSDALE 634 7 1.90% 584 8 1.94% CITY OF GLENDALE 611 8 1.83% 546 9 1.81% PINAL COUNTY 506 9 1.52% 382 12 1.27% CITY OF CHANDLER 496 10 1.49% 485 10 1.61% ALL OTHERS 9,455 28.37% 7,595 25.17% TOTAL 33,331 100.00% 30,180 100.00%
146 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
PSPRS SUMMARY OF BENEFIT INCREASES LAST TEN FISCAL YEARS YEAR EXCESS EARNED EXCESS BENEFIT ENDING YIELD PER EXCESS ON EXCESS UTILIZED TO EARNINGS INCREASE JUNE 30, STATUTE EARNINGS AVAILABLE FUND PBI AVAILABLE 4% CAP 2006 0.00% - 44,613,606 (91,412,190) 490,714,741 121.76 2007 8.05% 190,317,350 83,666,863 (101,767,604) 662,931,350 127.06 2008 0.00% - (48,208,368) (114,771,709) 499,951,273 134.34 2009 0.00% - (88,616,363) (125,721,193) 285,613,717 138.66 2010 4.47% 90,856,517 38,472,168 (139,653,075) 275,289,327 146.74 2011 8.37% 111,327,479 47,817,756 (154,776,639) 279,657,923 152.84 2012 0.00% - (2,209,298) (173,606,421) 103,842,204 159.13 2013 1.64% 23,833,551 11,048,811 (138,724,566) - 121.19 2014 4.28% 71,624,927 - (71,624,927) - 65.20 2015 0.00% - - - - 0.00
EORP SUMMARY OF BENEFIT INCREASES LAST TEN FISCAL YEARS YEAR EXCESS EARNED EXCESS BENEFIT ENDING YIELD PER EXCESS ON EXCESS UTILIZED TO EARNINGS INCREASE JUNE 30, STATUTE EARNINGS AVAILABLE FUND PBI AVAILABLE 4% CAP 2006 0.00% - 1,858,226 (8,946,622) 16,523,120 4.00% 2007 8.01% 20,886,734 2,810,583 (9,392,556) 30,827,881 4.00% 2008 0.00% - (2,340,761) (10,302,702) 18,184,418 4.00% 2009 0.00% - (3,227,552) (11,319,196) 3,637,670 4.00% 2010 4.47% 15,303,603 489,994 (12,367,914) 7,063,353 4.00% 2011 0.00% 32,774,743 1,226,904 (13,406,035) 27,658,965 4.00% 2012 0.00% - (218,506) (15,084,924) 12,355,535 4.00% 2013 0.00% 6,913,090 1,314,629 (16,212,682) 4,370,572 4.00% 2014 0.00% 17,528,322 580,412 (15,751,565) 6,727,741 4.00% 2015 0.00% - 247,581 (6,975,322) - 1.77%
CORP SUMMARY OF BENEFIT INCREASES LAST TEN FISCAL YEARS YEAR EXCESS EARNED EXCESS BENEFIT ENDING YIELD PER EXCESS ON EXCESS UTILIZED TO EARNINGS INCREASE JUNE 30, STATUTE EARNINGS AVAILABLE FUND PBI AVAILABLE 4% CAP 2006 0.00% - 3,383,613 (11,506,060) 33,292,645 4.00% 2007 7.77% 35,123,022 5,583,177 (13,572,783) 60,426,061 4.00% 2008 0.00% - (4,258,829) (15,533,554) 40,633,678 4.00% 2009 0.00% - (7,311,624) (18,197,108) 15,124,946 4.00% 2010 4.47% 22,836,733 2,037,330 (21,264,230) 18,734,779 4.00% 2011 0.00% 18,471,995 3,254,231 (25,641,306) 14,819,699 4.00% 2012 0.00% - (117,076) (14,702,623) - 1.94% 2013 0.00% 4,244,357 - (4,244,357) - 0.55% 2014 0.00% 12,916,571 - (12,916,571) - 1.59% 2015 0.00% - - - - 0.00%
Comprehensive Annual Financial Report 147 STATISTICAL SECTION
OPERATING INFORMATION
PSPRS SUMMARY OF GROWTH OF THE SYSTEM LAST TEN FISCAL YEARS YEAR TOTAL INVESTMENT ASSUMED NET AVERAGE ENDING ASSETS REALIZED ACTUARIAL EFFECTIVE EMPLOYER JUNE 30, AT BOOK EARNINGS YIELD YIELD RATE 2006 4,183,883,048 445,686,514 8.50% 11.78% 12.80% 2007 4,517,667,333 529,659,234 8.50% 12.93% 13.83% 2008 5,137,831,607 726,656,511 8.50% 16.26% 16.52% 2009 4,528,657,401 (693,024,100) 8.50% -11.82% 21.71% 2010 4,515,144,264 (853,785) 8.50% -1.52% 20.77% 2011 4,654,515,193 228,517,315 8.25% 6.44% 20.89% 2012 4,754,315,706 153,740,609 8.00% 4.25% 22.68% 2013 5,035,133,736 268,824,221 7.85% 7.16% 27.18% 2014 5,345,000,339 359,609,007 7.85% 7.69% 30.44% 2015 5,713,026,312 437,627,571 7.85% 7.94% 32.54%
EORP SUMMARY OF GROWTH OF THE SYSTEM LAST TEN FISCAL YEARS YEAR TOTAL INVESTMENT ASSUMED NET AVERAGE ENDING ASSETS REALIZED ACTUARIAL EFFECTIVE EMPLOYER JUNE 30, AT BOOK EARNINGS YIELD YIELD RATE 2006 275,729,455 31,226,907 8.50% 12.53% 20.54% 2007 299,238,103 37,306,895 8.50% 13.85% 18.55% 2008 324,245,532 51,421,361 8.50% 17.56% 20.21% 2009 284,301,733 (43,712,004) 8.50% -12.05% 28.00% 2010 275,228,597 (83,746) 8.50% -1.48% 26.25% 2011 281,066,482 13,833,726 8.25% 6.56% 29.79% 2012 278,266,609 9,054,084 8.00% 4.22% 32.99% 2013 283,202,703 15,232,109 7.85% 7.07% 36.44% 2014 289,437,455 22,551,048 7.85% 7.64% 23.50% 2015 296,427,743 23,012,960 7.85% 7.87% 23.50%
CORP SUMMARY OF GROWTH OF THE SYSTEM LAST TEN FISCAL YEARS YEAR TOTAL INVESTMENT ASSUMED NET AVERAGE ENDING ASSETS REALIZED ACTUARIAL EFFECTIVE EMPLOYER JUNE 30, AT BOOK EARNINGS YIELD YIELD RATE 2006 744,246,872 73,445,862 8.50% 11.18% 5.47% 2007 840,116,484 90,731,938 8.50% 12.14% 4.46% 2008 1,108,093,837 125,821,779 8.50% 13.50% 6.72% 2009 1,057,808,935 (175,258,029) 8.50% -13.04% 8.65% 2010 1,095,569,678 (322,346) 8.50% -1.50% 7.49% 2011 1,162,499,803 56,158,378 8.25% 6.43% 8.57% 2012 1,205,454,963 38,880,876 8.00% 4.27% 9.50% 2013 1,283,208,335 68,918,508 7.85% 7.20% 11.31% 2014 1,370,985,156 105,803,854 7.85% 7.72% 13.68% 2015 1,474,581,597 113,314,143 7.85% 7.99% 14.46%
148 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
PSPRS PSPRS BENEFITS PAYABLE JUNE 30, 2015 AVG BY TYPE OF BENEFIT AVERAGE AVERAGE RETIRE AGE SERVICE AGE PENSIONS ANNUAL AVERAGE BEING PAID NO. PENSIONS PENSIONS Normal retired members 64.0 23.5 51.5 RETIRED MEMBERS Disability retired members 57.5 14.3 44.0 Service Pensions 8,093 444,901,482 54,974 Spouse beneficiaries 69.1 19.2 44.1 Disability Pensions 1,516 65,871,811 43,451 Total Retired Members 9,609 510,773,293 53,156
SURVIVORS OF MEMBERS Spouses 1,358 59,564,402 43,862 Children w/Guardians 67 1,592,813 23,773 Total Survivors of Members 1,425 61,157,215 42,917
TOTAL PENSIONS BEING PAID 11,034 571,930,508 51,833
EORP EORP BENEFITS PAYABLE JUNE 30, 2015 AVG BY TYPE OF BENEFIT AVERAGE AVERAGE RETIRE AGE SERVICE AGE PENSIONS ANNUAL AVERAGE BEING PAID NO. PENSIONS PENSIONS Normal retired members 71.6 14.4 61.1 RETIRED MEMBERS Disability retired members 68.6 12.3 58.7 Service Pensions 893 47,228,332 52,887 Spouse beneficiaries 77.3 13.4 57.5 Disability Pensions 17 1,809,596 106,447 Total Retired Members 910 49,037,928 53,888
SURVIVORS OF MEMBERS Spouses 205 7,658,311 37,358 Children w/Guardians 1 47,814 47,814 Total Survivors of Members 206 7,706,125 37,408
TOTAL PENSIONS BEING PAID 1,116 56,744,053 50,846
CORP CORP BENEFITS PAYABLE JUNE 30, 2015 AVG BY TYPE OF BENEFIT AVERAGE AVERAGE RETIRE AGE SERVICE AGE PENSIONS ANNUAL AVERAGE BEING PAID NO. PENSIONS PENSIONS Normal retired members 63.9 19.9 56.6 RETIRED MEMBERS Disability retired members 56.5 9.7 45.9 Service Pensions 3,702 103,357,645 27,919 Spouse beneficiaries 66.5 12.6 52.2 Disability Pensions 130 2,658,204 20,448 Total Retired Members 3,832 106,015,849 27,666
SURVIVORS OF MEMBERS Spouses 544 9,730,765 17,887 Children w/Guardians 34 470,645 13,843 Total Survivors of Members 578 10,201,410 17,649
TOTAL PENSIONS BEING PAID 4,410 116,217,259 26,353
Comprehensive Annual Financial Report 149 STATISTICAL SECTION
OPERATING INFORMATION
PSPRS AVERAGE MONTHLY BENEFITS AND MEMBERSHIP IN RETIREMENT SYSTEM LAST TEN FISCAL YEARS
YEARS OF CREDITED SERVICE BY CATEGORY YEAR ENDING ALL JUNE 30, <5 5-10 10-15 15-20 20-25 25-30 30+ MEMBERS
2006 Average monthly benefit 2,323 2,410 2,522 2,629 2,931 4,210 5,114 3,176 Average final average salary 4,979 Number of retirees 221 288 368 465 3,727 1,461 652 7,182 2007 Average monthly benefit 2,449 2,522 2,620 2,751 3,045 4,321 4,950 3,359 Average final average salary 5,213 Number of retirees 208 302 382 481 3,948 1,787 525 7,633 2008 Average monthly benefit 2,373 2,654 2,703 2,858 3,115 4,281 5,183 3,467 Average final average salary 5,483 Number of retirees 233 317 403 501 4,209 2,013 565 8,241 2009 Average monthly benefit 2,638 2,741 2,894 3,007 3,293 4,492 5,401 3,669 Average final average salary 5,741 Number of retirees 202 336 425 511 4,351 2,201 583 8,609 2010 Average monthly benefit 2,768 2,879 2,952 3,137 3,434 4,652 5,592 3,821 Average final average salary 5,938 Number of retirees 210 343 439 533 4,482 2,333 614 8,954 2011 Average monthly benefit 2,868 3,008 3,061 3,282 3,577 4,820 5,791 3,978 Average final average salary 6,007 Number of retirees 221 355 469 551 4,741 2,540 645 9,522 2012 Average monthly benefit 2,988 3,116 3,184 3,405 3,718 4,973 5,988 4,123 Average final average salary 6,077 Number of retirees 228 367 478 567 4,872 2,636 654 9,802 2013 Average monthly benefit 3,039 3,122 3,160 3,393 3,718 4,999 6,031 4,131 Average final average salary 6,197 Number of retirees 236 386 501 588 5,041 2,740 667 10,159 2014 Average monthly benefit 3,224 3,244 3,304 3,483 3,892 5,182 6,259 4,301 Average final average salary 6,281 Number of retirees 231 398 527 627 5,215 2,842 684 10,524 2015 Average monthly benefit 3,241 3,214 3,264 3,500 3,890 5,227 6,309 4,319 Average final average salary 6,413 Number of retirees 229 418 545 646 5,465 3,016 715 11,034
* Detailed information not available prior to fiscal year ending June 30, 2006.
150 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
EORP AVERAGE MONTHLY BENEFITS AND MEMBERSHIP IN RETIREMENT SYSTEM LAST TEN FISCAL YEARS
YEARS OF CREDITED SERVICE BY CATEGORY YEAR ENDING ALL JUNE 30, <5 5-10 10-15 15-20 20-25 25-30 30+ MEMBERS
2006 Average monthly benefit 2,932 Average final average salary 5,634 Number of retirees 797 2007 Average monthly benefit 3,065 Average final average salary 5,895 Number of retirees 826 2008 Average monthly benefit 1,181 1,060 2,320 4,030 6,293 5,843 3,706 3,139 Average final average salary 6,090 Number of retirees 16 245 253 143 154 47 14 872 2009 Average monthly benefit 1,161 1,113 2,437 4,196 6,724 5,911 3,802 3,339 Average final average salary 6,388 Number of retirees 12 257 255 149 167 50 15 905 2010 Average monthly benefit 1,208 1,156 2,565 4,428 7,116 6,083 3,956 3,559 Average final average salary 6,525 Number of retirees 12 255 257 156 177 50 14 921 2011 Average monthly benefit 1,142 1,171 2,700 4,547 7,246 6,309 3,589 3,658 Average final average salary 6,517 Number of retirees 11 277 273 169 195 49 16 990 2012 Average monthly benefit 1,133 1,153 2,722 4,609 7,297 6,382 3,589 3,689 Average final average salary 6,580 Number of retirees 10 276 277 168 197 48 16 992 2013 Average monthly benefit 1,133 1,144 2,829 4,650 7,297 6,327 3,565 3,722 Average final average salary 6,576 Number of retirees 10 291 299 181 209 50 17 1,057 2014 Average monthly benefit 1,252 1,279 3,186 5,258 8,228 7,304 3,964 4,195 Average final average salary 6,489 Number of retirees 12 293 295 179 211 48 15 1,053
2015 Average monthly benefit 1,075 1,323 3,260 5,244 8,247 7,342 4,612 4,237 Average final average salary 6,520 Number of retirees 14 312 309 190 226 49 16 1,116
* Detailed information not available prior to fiscal year ending June 30, 2008.
Comprehensive Annual Financial Report 151 STATISTICAL SECTION
OPERATING INFORMATION
CORP AVERAGE MONTHLY BENEFITS AND MEMBERSHIP IN RETIREMENT SYSTEM LAST TEN FISCAL YEARS
YEARS OF CREDITED SERVICE BY CATEGORY YEAR ENDING ALL JUNE 30, <5 5-10 10-15 15-20 20-25 25-30 30+ MEMBERS
2006 Average monthly benefit 1,589 Average final average salary 2,892 Number of retirees 1,955 2007 Average monthly benefit 1,675 Average final average salary 3,096 Number of retirees 2,123 2008 Average monthly benefit 1,093 998 1,028 1,467 2,055 2,934 3,506 1,753 Average final average salary 3,354 Number of retirees 122 158 554 391 849 288 66 2,428 2009 Average monthly benefit 1,155 1,080 1,079 1,596 2,227 3,311 4,019 1,900 Average final average salary 3,535 Number of retirees 126 164 614 400 930 290 67 2,591 2010 Average monthly benefit 1,208 1,133 1,131 1,669 2,308 3,397 4,189 1,999 Average final average salary 3,606 Number of retirees 132 172 671 438 1,078 335 82 2,908 2011 Average monthly benefit 1,235 1,172 1,169 1,733 2,364 3,424 4,322 2,089 Average final average salary 3,682 Number of retirees 138 176 715 458 1,272 399 98 3,256 2012 Average monthly benefit 1,233 1,185 1,168 1,733 2,363 3,392 4,435 2,108 Average final average salary 3,743 Number of retirees 142 170 740 477 1,406 434 107 3,476 2013 Average monthly benefit 1,243 1,189 1,176 1,721 2,357 3,373 4,333 2,110 Average final average salary 3,808 Number of retirees 148 169 811 524 1,566 477 115 3,810 2014 Average monthly benefit 1,340 1,292 1,216 1,791 2,428 3,482 4,423 2,192 Average final average salary 3,719 Number of retirees 150 174 864 554 1,706 517 125 4,090
2015 Average monthly benefit 1,287 1,261 1,214 1,803 2,398 3,475 4,418 2,196 Average final average salary 3,881 Number of retirees 150 171 916 585 1,877 566 145 4,410
* Detailed information not available prior to fiscal year ending June 30, 2008.
152 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
PSPRS 10 YEAR ESTIMATED CONTRIBUTION RATES (IN PERCENTAGE)
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 PSPRS Aggregate 41.86 41.77 41.77 41.80 41.54 41.33 41.25 41.13 40.98 40.81 Dept. of Liquor Licenses and Control 61.21 69.09 70.41 71.05 70.91 70.78 70.68 70.87 70.78 70.44 Dept. of Public Safety 69.96 78.42 78.99 79.24 79.14 79.09 79.16 79.12 79.15 79.17 Northern Arizona University 45.35 49.85 50.14 50.30 50.58 50.42 50.15 50.06 49.78 49.45 University of Arizona 31.01 33.43 33.29 33.26 32.95 32.56 32.33 32.01 31.72 31.43 Arizona State University 33.20 35.71 35.64 35.60 35.30 35.15 35.00 34.85 34.69 34.54 Arizona Game and Fish Dept. 81.48 92.45 94.04 94.82 95.30 95.37 95.45 95.49 95.43 95.36 Dept. of Law 70.12 69.72 69.41 69.22 68.92 68.70 68.59 68.48 68.41 68.34 Dept. of Emergency and Military Affairs 28.55 32.03 31.99 31.85 31.50 31.15 30.93 30.67 30.37 30.13 Arizona State Parks Board 39.32 44.57 44.69 44.76 44.41 44.24 44.06 44.31 44.44 44.18
EORP 10 YEAR ESTIMATED CONTRIBUTION RATES (IN PERCENTAGE)
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 EORP Aggregate 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 Counties and State 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 Cities and Towns 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50 23.50
CORP 10 YEAR ESTIMATED CONTRIBUTION RATES (IN PERCENTAGE)
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 CORP Aggregate 18.16 17.92 17.73 17.65 17.41 17.20 17.08 16.97 16.87 16.77 State Department of Corrections 16.77 18.57 18.49 18.40 18.15 17.94 17.82 17.71 17.61 17.52 Dept. of Public Safety - Dispatchers 15.61 17.11 17.11 17.17 16.95 16.75 16.68 16.63 16.60 16.57 Dept. of Public Safety - Detention 6.84 6.88 6.85 6.84 6.77 6.71 6.67 6.62 6.58 6.54 Administrative Offices of the Courts (AOC) 17.97 19.59 19.59 19.60 19.38 19.20 19.11 19.01 18.90 18.79 Dept. of Juvenile Corrections 20.54 23.19 23.19 23.13 22.88 22.65 22.51 22.39 22.33 22.27
*Estimated contribution rates for the next 10 years per Amended Statute 38-848.
Comprehensive Annual Financial Report 153 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
AK CHIN INDIAN COMM. FIRE DEPT. 969,810 (25,259) 240,108 0 1,184,659 AK CHIN INDIAN COMM. POLICE DEPT. 442,445 7,582 172,327 (13,709) 608,644 APACHE COUNTY SHERIFF'S DEPT. 1,020,749 (56,313) 168,806 (6,865) 1,126,377 APACHE JUNCTION FIRE DISTRICT 5,629,677 (101,270) 790,270 0 6,318,678 APACHE JUNCTION POLICE DEPARTMENT 2,576,075 (39,698) 369,455 (187) 2,905,645 ARIZONA STATE PARK RANGERS 1,881,306 (160,220) 137,941 (9,633) 1,849,394 ASU PD PSPRS LOCAL BOARD 2,861,633 (133,190) 554,187 (89,875) 3,192,755 ATTORNEY GENERAL INVESTIGATORS 573,988 67,155 178,775 (12,637) 807,280 AVONDALE FIRE DEPARTMENT 3,939,397 2,189 597,484 0 4,539,071 AVONDALE POLICE DEPARTMENT 4,652,717 15,138 861,574 (58,079) 5,471,350 AVRA VALLEY FIRE DISTRICT 565,264 0 176,956 0 742,220 AZ DPT. LIQ. LIC. & CONTROL INVST 757,031 (94,275) 74,302 0 737,057 BENSON FIRE DEPARTMENT 86,800 0 6,990 0 93,791 BENSON POLICE DEPARTMENT 561,358 (121,689) 84,093 0 523,761 BISBEE FIRE DEPARTMENT 552,022 (65,390) 95,678 (16,094) 566,217 BISBEE POLICE DEPARTMENT 492,664 (74,205) 70,709 (45,513) 443,654 BLACK CANYON FIRE DISTRICT 220,716 (31,079) 35,520 0 225,157 BUCKEYE FIRE DEPARTMENT 4,121,213 (7,450) 737,903 0 4,851,665 BUCKEYE POLICE DEPARTMENT 3,696,084 93,068 711,650 (43,336) 4,457,465 BUCKEYE VALLEY FIRE DISTRICT 2,364,371 (74,188) 428,877 (78,067) 2,640,993 BUCKSKIN FIRE DISTRICT 465,883 (20,350) 91,958 0 537,491 BULLHEAD CITY FIRE DEPARTMENT 5,180,376 (381,685) 608,194 (8,131) 5,398,754 BULLHEAD CITY POLICE DEPARTMENT 4,483,232 (401,758) 527,323 (308,413) 4,300,384 CAMP VERDE FIRE DISTRICT 1,072,939 0 170,207 0 1,243,146 CAMP VERDE MARSHALL'S 486,956 0 96,283 0 583,239 CASA GRANDE FIRE DEPARTMENT 3,404,141 (174,570) 618,303 (18,885) 3,828,988 CASA GRANDE POLICE DEPARTMENT 3,942,472 (51,822) 559,645 (21,235) 4,429,060 CAVE CREEK MARSHALS 58,900 0 10,511 0 69,411 CENTRAL AZ. COLLEGE POLICE DEPT. 148,442 0 34,852 0 183,294 CENTRAL YAVAPAI FIRE DISTRICT 5,304,843 (346,604) 658,449 0 5,616,688 CHANDLER FIRE DEPARTMENT 16,162,820 (433,631) 1,837,291 0 17,566,480 CHANDLER POLICE DEPARTMENT 24,036,106 (691,969) 3,308,265 (85,655) 26,566,747 CHINO VALLEY FIRE DISTRICT 1,725,061 (140,505) 240,325 (117) 1,824,764 CHINO VALLEY POLICE DEPARTMENT 859,680 (53,697) 143,622 (25,493) 924,112 CHRISTOPHER-KOHL'S FIRE DISTRICT 101,185 0 24,275 (11,145) 114,314 CITY OF MARICOPA - FIRE 3,044,158 (78,647) 540,412 (56,665) 3,449,259 CITY OF MARICOPA (POLICE DEPT.) 1,940,184 (56,054) 428,486 (80,627) 2,231,989 CLARKDALE FIRE DISTRICT 322,144 (43,840) 56,621 (3,016) 331,910 CLARKDALE POLICE DEPARTMENT 279,707 0 39,903 (56,212) 263,398 CLIFTON FIRE DEPARTMENT 0 0 0 0 0
154 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
CLIFTON POLICE DEPARTMENT 64,910 0 37,273 0 102,182 COCHISE COUNTY SHERIFF'S DEPT 3,284,651 (504) 533,148 (50,516) 3,766,779 COCONINO COUNTY SHERIFF'S DEPT 2,212,186 (105,393) 451,605 0 2,558,397 COOLIDGE FIRE DEPARTMENT 76,600 0 27,932 0 104,532 COOLIDGE POLICE DEPARTMENT 1,043,936 (7,504) 190,449 0 1,226,881 CORONA DE TUCSON FIRE DISTRICT 567,037 (60,036) 110,882 0 617,883 COTTONWOOD FIRE DEPARTMENT 1,156,067 (45,966) 187,916 0 1,298,016 COTTONWOOD POLICE DEPARTMENT 1,250,873 (7,076) 227,682 0 1,471,479 DAISY MOUNTAIN FIRE DISTRICT 5,523,475 (117,240) 763,225 0 6,169,460 DEPARTMENT OF EMER & MILITARY AFF 1,773,936 (84,068) 243,396 (34,934) 1,898,330 DEPARTMENT OF PUBLIC SAFETY 32,195,030 (2,457,964) 4,418,096 (88,572) 34,066,590 DESERT HILLS FIRE DEPARTMENT 494,994 (7,280) 112,663 (40,578) 559,798 DOUGLAS FIRE DEPARTMENT 1,013,470 0 151,481 0 1,164,951 DOUGLAS POLICE DEPARTMENT 1,519,306 (105,703) 211,626 (65,350) 1,559,878 DREXEL HEIGHTS FIRE DISTRICT 3,925,190 (164,497) 487,051 0 4,247,744 EAGAR POLICE DEPARTMENT 385,400 0 39,866 0 425,266 EL MIRAGE FIRE DEPARTMENT 1,055,428 78,647 199,018 (37,995) 1,295,098 EL MIRAGE POLICE DEPARTMENT 2,104,368 (277,168) 321,510 0 2,148,710 ELOY FIRE DISTRICT 1,034,330 (31,952) 208,616 (32,869) 1,178,126 ELOY POLICE DEPARTMENT 1,404,320 (9,206) 290,218 0 1,685,331 FLAGSTAFF FIRE DEPARTMENT 5,443,941 (418,597) 732,850 0 5,758,195 FLAGSTAFF POLICE DEPARTMENT 5,349,939 (281,059) 841,533 (125,598) 5,784,815 FLORENCE FIRE DEPARTMENT 923,893 90,406 213,250 (18,714) 1,208,836 FLORENCE POLICE DEPARTMENT 956,511 (76,119) 208,870 0 1,089,262 FORT MCDOWELL TRIBAL FIRE DEPT. 605,188 0 91,109 (56,593) 639,705 FORT MCDOWELL TRIBAL POLICE DEPT. 1,118,877 0 158,418 0 1,277,296 FORT MOJAVE MESA FIRE DISTRICT 1,556,112 (156,057) 229,847 (20,356) 1,609,547 FORT MOJAVE TRIBAL POLICE DEPT. 745,734 0 170,911 0 916,645 FREDONIA MARSHALS 80,915 0 13,789 0 94,705 FRY FIRE DISTRICT 1,731,845 8,482 309,556 0 2,049,883 GAME AND FISH DEPARTMENT 6,972,121 (496,549) 754,441 0 7,230,013 GILA COUNTY SHERIFF'S DEPARTMENT 1,490,352 (83,263) 211,706 (17,755) 1,601,040 GILA RIVER FIRE DEPARTMENT 2,808,384 (29,736) 503,211 (54,369) 3,227,489 GILA RIVER POLICE DEPARTMENT 4,644,224 (39,162) 870,238 (70,350) 5,404,949 GILBERT FIRE DEPARTMENT 12,859,758 (58,628) 1,903,578 0 14,704,708 GILBERT POLICE DEPARTMENT 14,575,730 (354,107) 2,107,439 (108,520) 16,220,541 GLENDALE FIRE DEPARTMENT 19,036,220 (402,774) 2,379,724 (57,117) 20,956,053 GLENDALE POLICE DEPARTMENT 27,343,133 (1,570,503) 4,009,071 (99,120) 29,682,582 GLOBE FIRE DEPARTMENT 811,480 (120,228) 94,304 0 785,555 GLOBE POLICE DEPARTMENT 768,135 56,026 120,405 (8,914) 935,653
Comprehensive Annual Financial Report 155 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
GOLDEN SHORES FIRE DISTRICT 290,037 0 47,095 (41,728) 295,404 GOLDEN VALLEY FIRE DISTRICT 872,689 0 170,339 0 1,043,028 GOLDER RANCH FIRE DISTRICT 6,105,996 (97,609) 1,043,183 (20,719) 7,030,852 GOODYEAR FIRE DEPARTMENT 5,901,635 (110,328) 848,048 (51,697) 6,587,657 GOODYEAR POLICE DEPARTMENT 4,889,631 (28,250) 768,858 (159,450) 5,470,790 GRAHAM COUNTY ATTORNEY INVEST. 0 0 0 0 0 GRAHAM COUNTY SHERIFF'S DEPT. 824,153 (2,038) 101,878 (63,329) 860,664 GREEN VALLEY FIRE DISTRICT 2,673,059 (143,299) 447,010 (66,445) 2,910,326 GREENLEE CNTY ATTY INVESTIGATORS 0 0 0 0 0 GREENLEE COUNTY SHERIFF'S DEPT. 636,306 (104,269) 103,877 0 635,914 GROOM CREEK FIRE DISTRICT 194,871 0 44,871 0 239,742 GUADALUPE FIRE DEPARTMENT 277,041 0 30,153 0 307,194 HARQUAHALA FIRE DISTRICT 354,439 0 72,378 0 426,817 HAYDEN POLICE DEPARTMENT 136,368 4,010 42,001 (14,398) 167,982 HEBER-OVERGAARD FIRE DISTRICT 426,588 0 88,519 0 515,107 HELLSGATE FIRE DISTRICT 417,659 (160,947) 60,305 0 317,018 HIGHLANDS FIRE DISTRICT 1,110,005 (217,439) 181,869 0 1,074,435 HOLBROOK POLICE DEPARTMENT 427,138 (21,412) 74,656 (18,876) 461,506 HUACHUCA CITY POLICE DEPARTMENT 70,266 55,663 37,135 0 163,065 HUALAPAI INDIAN TRIBE POLICE DEPT 539,703 0 113,655 (43,074) 610,284 JEROME POLICE DEPARTMENT 85,929 0 18,421 0 104,350 KEARNY POLICE DEPARTMENT 186,635 (126,004) 20,234 0 80,865 KINGMAN FIRE DEPARTMENT 3,075,868 (297,632) 363,567 0 3,141,803 KINGMAN POLICE DEPARTMENT 2,475,818 (28,907) 335,245 (148,132) 2,634,023 LA PAZ COUNTY ATTY. INVESTIGATORS 0 0 0 0 0 LA PAZ COUNTY SHERIFF'S DEPT. 1,050,241 (167,948) 166,848 (66,123) 983,018 LAKE HAVASU CITY FIRE DEPARTMENT 4,109,716 (166,574) 575,092 (88,629) 4,429,606 LAKE HAVASU CITY POLICE DEPT. 4,431,495 (596,177) 554,019 (43,657) 4,345,681 LAKE MOHAVE RANCHOS FIRE DISTRICT 142,453 0 24,531 (24,912) 142,072 MAMMOTH POLICE DEPARTMENT 91,394 0 12,452 (11,612) 92,233 MARANA POLICE DEPARTMENT 3,347,351 (129,750) 579,390 (37,032) 3,759,960 MARICOPA CNTY ATTY INVESTIGATORS 741,704 0 147,013 (44,678) 844,039 MARICOPA COUNTY PARK RANGERS 24,132 0 0 0 24,132 MARICOPA COUNTY SHERIFF'S OFFICE 42,727,114 (1,734,695) 5,718,569 (204,363) 46,506,625 MAYER FIRE DISTRICT 826,226 (102,177) 101,622 (12,921) 812,750 MESA FIRE DEPARTMENT 32,690,891 (1,772,192) 3,846,723 (84,533) 34,680,890 MESA POLICE DEPARTMENT 56,009,045 (3,524,981) 7,613,397 (273,401) 59,824,061 MIAMI FIRE DEPARTMENT - GONE 0 0 0 0 0 MIAMI POLICE DEPARTMENT 246,380 0 23,970 (3,332) 267,018 MOHAVE COUNTY SHERIFF'S DEPT. 4,268,011 (501,388) 476,318 (89,905) 4,153,036
156 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
MOHAVE VALLEY FIRE DISTRICT 1,300,151 (141,209) 182,346 (79,911) 1,261,377 MONTEZUMA RIMROCK FIRE DISTRICT 302,741 (22,524) 52,422 (8,636) 324,003 MOUNT LEMMON FIRE DISTRICT 147,195 0 29,656 0 176,851 NAU CAMPUS POLICE 821,908 (182,055) 122,017 (20,488) 741,382 NAVAJO COUNTY ATTY'S INVESTIGATOR 0 0 0 0 0 NAVAJO COUNTY SHERIFF'S DEPT. 1,441,634 (98,154) 261,993 0 1,605,473 NOGALES FIRE DEPARTMENT 2,408,266 (65,719) 261,083 0 2,603,631 NOGALES POLICE DEPARTMENT 2,752,786 (181,726) 356,974 0 2,928,034 NORTHERN AZ. CONSOLIDATED FD #1 1,071,953 (59,171) 139,267 0 1,152,049 NORTHWEST FIRE DISTRICT 11,205,639 (475,945) 1,637,449 (260) 12,366,883 ORACLE FIRE DISTRICT 152,599 0 34,574 (15,135) 172,038 ORO VALLEY POLICE DEPT. 5,854,950 (142,209) 794,478 (31,928) 6,475,290 PAGE FIRE DEPARTMENT 423,544 0 99,301 (18,716) 504,130 PAGE POLICE DEPARTMENT 765,511 (218,353) 125,347 (105,387) 567,118 PALOMINAS FIRE DISTRICT 79,529 (8,482) 37,978 (9,264) 99,762 PARADISE VALLEY POLICE DEPARTMENT 2,055,406 (366,567) 411,948 (19,300) 2,081,487 PARKER POLICE DEPARTMENT 451,940 (73,509) 62,615 0 441,047 PASCUA YAQUI TRIBE FIRE DEPT. 978,515 0 168,087 0 1,146,602 PASCUA YAQUI TRIBE POLICE DEPT. 1,307,233 (55,663) 240,643 0 1,492,212 PATAGONIA MARSHALS 59,876 0 13,518 0 73,394 PAYSON FIRE DEPARTMENT 1,245,030 (23,357) 214,441 (15,242) 1,420,872 PAYSON POLICE DEPARTMENT 1,299,141 (21,072) 195,231 0 1,473,300 PEORIA FIRE DEPARTMENT 10,654,056 (359,414) 1,238,541 0 11,533,184 PEORIA POLICE DEPARTMENT 10,434,755 (466,646) 1,689,030 (76,708) 11,580,431 PHOENIX FIRE DEPARTMENT 142,166,698 (4,542,290) 14,249,866 (182,515) 151,691,759 PHOENIX POLICE DEPARTMENT 256,609,626 (13,725,262) 28,941,182 (1,138,806) 270,686,741 PICTURE ROCKS FIRE DISTRICT 546,439 19,961 70,364 (72,753) 564,010 PIMA COUNTY ATTORNEY INVESTIGATOR 217,269 0 18,913 0 236,182 PIMA COUNTY COMM. COLLEGE POLICE 1,069,488 0 196,951 (1,131) 1,265,308 PIMA COUNTY SHERIFF'S DEPARTMENT 17,708,212 (883,450) 2,382,994 (71,677) 19,136,079 PIMA POLICE DEPARTMENT 56,963 0 18,593 0 75,556 PINAL COUNTY SHERIFF'S DEPARTMENT 10,048,987 (523,360) 1,389,238 (362,651) 10,552,214 PINE-STRAWBERRY FIRE DISTRICT 1,063,942 (237,460) 114,765 0 941,246 PINETOP FIRE DISTRICT 1,159,401 7,851 200,826 (7,851) 1,360,227 PINETOP-LAKESIDE POLICE DEPT. 496,042 (4,434) 72,855 0 564,463 PINEWOOD FIRE DISTRICT 645,632 (44,348) 128,098 0 729,381 PONDEROSA FIRE DISTRICT 17,192 0 19,516 0 36,708 PRESCOTT FIRE DEPARTMENT 3,683,276 (324,416) 463,343 0 3,822,203 PRESCOTT POLICE DEPARTMENT 3,296,691 (273,474) 488,411 (13,552) 3,498,075 PRESCOTT VALLEY POLICE DEPARTMENT 3,064,236 (404,391) 496,178 (3,903) 3,152,120
Comprehensive Annual Financial Report 157 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
QUARTZSITE FIRE DISTRICT 268,576 (18,168) 54,645 0 305,054 QUARTZSITE POLICE DEPARTMENT 300,639 (27,950) 47,021 (36,712) 282,998 QUEEN CREEK FIRE DEPARTMENT 1,114,443 (35,121) 264,558 0 1,343,880 QUEEN VALLEY FIRE DISTRICT 70,801 0 13,642 0 84,443 RINCON VALLEY FIRE DISTRICT 1,165,347 5,692 211,323 0 1,382,362 RIO RICO FIRE DISTRICT 963,013 6,559 176,557 (43,386) 1,102,743 RIO VERDE FIRE DISTRICT 1,008,888 (117,679) 210,153 0 1,101,362 SAFFORD POLICE DEPARTMENT 1,139,042 0 143,178 0 1,282,220 SAHUARITA POLICE DEPARTMENT 1,827,625 0 285,067 (22,532) 2,090,161 SALT RIVER PIMA-MARICOPA FIRE 4,524,323 (15,275) 725,602 (52,206) 5,182,445 SALT RIVER PIMA-MARICOPA POLICE 5,033,652 (120,441) 874,970 (371,088) 5,417,093 SAN CARLOS TRIBAL POLICE DEPT. 686,417 (25,501) 231,871 (123,964) 768,824 SAN LUIS FIRE DEPARTMENT 962,497 (53,789) 173,223 (9,831) 1,072,100 SAN LUIS POLICE DEPARTMENT 1,220,015 0 182,813 (90,764) 1,312,064 SANTA CRUZ COUNTY SHERIFF'S DEPT. 1,599,355 (74,535) 198,938 (44,485) 1,679,273 SCOTTSDALE FIRE DEPARTMENT 18,703,633 (546,922) 2,336,755 (764) 20,492,702 SCOTTSDALE POLICE DEPARTMENT 30,882,764 (2,663,998) 3,943,986 (340,786) 31,821,966 SEDONA FIRE DISTRICT 4,223,827 (60,316) 642,980 (59,923) 4,746,568 SEDONA POLICE DEPARTMENT 922,328 7,076 185,850 0 1,115,254 SHOW LOW POLICE DEPARTMENT 1,348,164 (75,444) 219,236 0 1,491,956 SIERRA VISTA FIRE DEPARTMENT 2,576,381 (254,716) 303,093 (78,069) 2,546,689 SIERRA VISTA POLICE DEPARTMENT 3,148,508 33,590 458,242 (49,251) 3,591,089 SNOWFLAKE POLICE DEPARTMENT 481,815 (93,195) 85,034 (29,431) 444,222 SOMERTON FIRE DEPARTMENT 607,680 0 97,766 0 705,446 SOMERTON POLICE DEPARTMENT 776,795 (46,428) 102,364 0 832,732 SONOITA ELGIN FIRE DEPARTMENT 220,462 (17,001) 53,305 (97,305) 159,461 SOUTH TUCSON FIRE DEPARTMENT 193,051 0 17,436 0 210,487 SOUTH TUCSON POLICE DEPARTMENT 511,674 0 65,326 0 577,000 SPRINGERVILLE POLICE DEPARTMENT 257,491 0 42,555 0 300,046 ST. JOHNS POLICE DEPARTMENT 163,634 (4,541) 28,751 0 187,843 SUMMIT FIRE DISTRICT 1,895,283 (173,046) 304,232 0 2,026,469 SUN CITY FIRE DISTRICT 5,174,519 (334,478) 459,518 0 5,299,559 SUN CITY WEST FIRE DISTRICT 3,945,594 (67,644) 527,193 0 4,405,143 SUN LAKES FIRE DISTRICT 2,701,271 (212,662) 381,549 (5,542) 2,864,615 SUN SITES PEARCE FIRE DISTRICT 157,769 0 34,220 0 191,989 SUPERIOR POLICE DEPARTMENT 182,712 (20,220) 40,615 0 203,107 SURPRISE FIRE DEPARTMENT 6,769,463 (76,214) 1,085,819 0 7,779,069 SURPRISE POLICE DEPARTMENT 6,658,699 (356,901) 1,196,870 (15,790) 7,482,879 TEMPE FIRE DEPARTMENT 12,991,719 (394,558) 1,627,959 0 14,225,120 TEMPE POLICE DEPARTMENT 24,969,771 (1,562,559) 3,641,788 (105,671) 26,943,328
158 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 PSPRS SYSTEM BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
THATCHER POLICE DEPARTMENT 534,715 34,115 84,677 (53,128) 600,379 THREE POINTS FIRE DISTRICT 557,811 0 98,126 (16,298) 639,639 TIMBER MESA FIRE AND MEDICAL DIST 2,731,369 (79,369) 451,335 (67,772) 3,035,563 TOHONO O'ODHAM NATION FIRE DEPT. 1,459,894 (9,756) 315,688 (24,449) 1,741,376 TOHONO O'ODHAM NATION POLICE DEPT 2,508,193 (111,760) 534,454 (34,339) 2,896,548 TOLLESON FIRE DEPARTMENT 2,291,291 6,901 269,101 0 2,567,293 TOLLESON POLICE DEPARTMENT 1,372,966 (169,374) 217,506 (84,526) 1,336,572 TOMBSTONE MARSHAL'S DEPARTMENT 150,640 0 13,419 0 164,059 TONOPAH VALLEY FIRE DISTRICT 199,790 0 59,985 0 259,775 TOWN OF SUPERIOR (FIRE DEPT) 90,386 0 24,522 0 114,908 TRI-CITY FIRE DISTRICT 645,095 (6,899) 145,276 0 783,473 TUBAC FIRE DISTRICT 1,195,589 0 163,261 (36,396) 1,322,454 TUCSON AIRPORT AUTHORITY FIRE DPT 977,186 (61,799) 120,005 0 1,035,392 TUCSON AIRPORT AUTHORITY POLICE 1,254,101 (70,964) 280,628 0 1,463,765 TUCSON FIRE 33,334,958 (1,113,210) 4,092,378 0 36,314,127 TUCSON POLICE 49,779,009 (3,977,614) 7,096,010 (154,282) 52,743,123 U OF A CAMPUS POLICE DEPARTMENT 3,429,660 (132,362) 423,075 (7,005) 3,713,367 VERDE VALLEY FIRE DISTRICT 1,384,887 0 250,363 0 1,635,250 WELLTON POLICE 68,245 50,573 27,719 0 146,537 WHETSTONE FIRE DISTRICT 100,042 0 24,732 0 124,774 WICKENBURG FIRE DEPARTMENT 289,613 0 59,935 0 349,549 WICKENBURG POLICE DEPARTMENT 545,120 (94,390) 118,122 0 568,852 WILLCOX POLICE DEPARTMENT 378,236 (12,008) 58,589 0 424,818 WILLIAMS POLICE DEPARTMENT 236,292 5,904 59,320 (8,319) 293,197 WILLIAMSON VALLEY FIRE DISTRICT 185,786 68,969 192,118 (37,747) 409,126 WINSLOW FIRE DEPARTMENT 230,222 0 35,148 (20,618) 244,751 WINSLOW POLICE DEPARTMENT 1,068,966 (72,599) 123,792 0 1,120,159 WITTMANN FIRE DISTRICT 268,119 0 62,524 0 330,642 YAVAPAI CNTY ATTRNY INVESTIGATORS 0 0 0 0 0 YAVAPAI COUNTY SHERIFF'S DEPT. 5,658,480 (164,148) 762,569 (72,870) 6,184,032 YAVAPAI PRESCOTT TRIBAL POLICE 146,520 41,387 31,095 (45,332) 173,670 YOUNGTOWN POLICE DEPARTMENT 80,391 (45,051) 6,259 0 41,599 YUMA COUNTY SHERIFF'S DEPARTMENT 3,755,120 (88,831) 600,695 (58,414) 4,208,569 YUMA FIRE DEPARTMENT 6,790,344 (815,308) 899,220 (6,627) 6,867,628 YUMA POLICE DEPARTMENT 8,255,795 (315,879) 1,313,708 (143,097) 9,110,527
TOTALS 1,248,939,461 (59,410,054) 164,792,065 (8,355,286) 1,345,966,186
Comprehensive Annual Financial Report 159 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN REFUNDABLE MEMBER RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 RESERVE CONTRIB WITHDRAWN 2015 CORP PLAN BALANCES TRANSFERS RECEIVED MEMBERS BALANCES
ADMIN. OFFICE OF THE COURT (CORP-AOC) 79,115,789 (5,275,004) 9,614,012 (1,071,573) 82,383,224 APACHE COUNTY - CORP 299,822 0 54,001 (32,546) 321,277 CITY OF AVONDALE - DETENTION 343,003 12,022 44,647 0 399,672 CITY OF SOMERTON - DISPATCHERS 127,536 0 13,596 0 141,131 COCHISE COUNTY - CORP 1,316,316 (84,582) 171,671 (47,948) 1,355,456 COCONINO COUNTY - CORP 1,829,560 (46,040) 312,482 (60,213) 2,035,790 DEPARTMENT OF CORRECTIONS - CORP 205,305,723 (11,973,387) 27,734,411 (10,630,405) 210,436,342 DEPARTMENT OF PUBLIC SAFETY 2,426,453 (187,012) 176,654 (191,825) 2,224,270 DEPARTMENT OF PUBLIC SAFETY DETENTION 32,335 8 6,735 (5,554) 33,524 DEPT OF JUVENILE CORRECTIONS-CORP 12,786,702 (717,427) 1,686,662 (729,926) 13,026,009 GILA COUNTY - CORP 1,202,364 0 188,093 (173,852) 1,216,606 GILA COUNTY - DISPATCHERS 225,464 (100) 20,252 0 245,615 GRAHAM COUNTY - DETENTION 488,431 (38,528) 122,500 (63,613) 508,790 GRAHAM COUNTY - DISPATCHERS 146,164 0 14,585 0 160,749 MARICOPA COUNTY - CORP 59,660,474 (2,569,686) 8,470,324 (1,779,575) 63,781,538 MOHAVE COUNTY - CORP 1,589,808 (245,880) 330,465 (126,532) 1,547,861 NAVAJO COUNTY - CORP 832,471 (93,943) 137,233 (166,726) 709,036 ORO VALLEY - DISPATCHERS 404,133 (94,726) 30,272 (38,721) 300,958 PIMA COUNTY - CORP 12,372,473 (685,534) 1,737,539 (649,162) 12,775,315 PINAL COUNTY - CORP 7,504,976 (212,938) 850,620 (1,376,958) 6,765,699 PINAL COUNTY - DISPATCHERS 533,119 0 43,234 (73,274) 503,079 SANTA CRUZ COUNTY - CORP 487,316 (69,075) 83,854 (55,800) 446,295 TOWN OF MARANA - DISPATCHERS 348,097 0 35,981 (27,136) 356,943 TOWN OF WICKENBURG-DISPATCHERS 79,143 (163) 10,178 0 89,157 YAVAPAI COUNTY - CORP 3,673,682 (63,676) 558,422 (403,055) 3,765,373 YAVAPAI COUNTY - DISPATCHERS 156,583 (21,375) 18,633 (18,704) 135,137 YUMA COUNTY - CORP 3,067,182 (144,069) 442,896 (513,621) 2,852,389
TOTALS 396,355,115 (22,511,113) 52,909,952 (18,236,718) 408,517,236
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Comprehensive Annual Financial Report 161 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
AK CHIN INDIAN COMM. FIRE DEPT. 3,825,197 (3,941) (3,225) 310,829 0 (166,012) AK CHIN INDIAN COMM. POLICE DEPT. 1,962,979 (2,022) 2,651 199,743 0 (102,440) APACHE COUNTY SHERIFF'S DEPT. 2,457,891 (2,532) 56,313 630,617 0 (798,464) APACHE JUNCTION FIRE DISTRICT 17,297,142 (17,819) 101,270 1,015,424 0 (638,368) APACHE JUNCTION POLICE DEPARTMENT 8,475,947 (8,732) (18,415) 1,279,586 0 (1,494,512) ARIZONA STATE PARK RANGERS 7,276,669 (7,496) 160,220 370,133 0 (475,017) ASU PD PSPRS LOCAL BOARD 11,364,339 (11,707) 82,004 1,493,138 0 (1,599,944) ATTORNEY GENERAL INVESTIGATORS 2,952,428 (3,042) 61,743 1,635,478 0 (1,260,307) AVONDALE FIRE DEPARTMENT 11,571,294 (11,921) 863 741,156 110,129 (355,057) AVONDALE POLICE DEPARTMENT 13,589,391 (14,000) 26 1,318,663 0 (1,017,784) AVRA VALLEY FIRE DISTRICT 2,515,879 (2,592) 0 174,206 0 (115,408) AZ DPT. LIQ. LIC. & CONTROL INVST 2,972,634 (3,062) 64,956 343,798 0 (543,983) BENSON FIRE DEPARTMENT 329,041 (339) 0 (5,155) 9,775 0 BENSON POLICE DEPARTMENT 1,421,496 (1,464) 83,215 161,488 0 (175,329) BISBEE FIRE DEPARTMENT 316,224 (326) 62,838 553,564 12,708 (810,930) BISBEE POLICE DEPARTMENT 1,207,219 (1,244) 74,205 401,838 0 (655,111) BLACK CANYON FIRE DISTRICT 545,854 (562) (10,479) 27,427 3,127 0 BUCKEYE FIRE DEPARTMENT 10,026,304 (10,329) (1,713) 861,253 114,200 0 BUCKEYE POLICE DEPARTMENT 10,244,731 (10,554) 25,915 1,096,508 0 (630,143) BUCKEYE VALLEY FIRE DISTRICT 5,605,448 (5,775) 74,188 434,500 32,389 (65,577) BUCKSKIN FIRE DISTRICT 1,254,622 (1,293) 38,518 263,453 17,477 (352,649) BULLHEAD CITY FIRE DEPARTMENT 21,234,086 (21,875) 367,756 897,648 75,353 (864,210) BULLHEAD CITY POLICE DEPARTMENT 15,691,648 (16,165) 401,758 1,240,272 0 (1,561,511) CAMP VERDE FIRE DISTRICT 3,627,881 (3,737) 0 231,395 0 (144,210) CAMP VERDE MARSHALL'S 2,494,302 (2,570) 0 225,914 0 (264,036) CASA GRANDE FIRE DEPARTMENT 9,800,008 (10,096) 201,646 891,946 76,766 (939,854) CASA GRANDE POLICE DEPARTMENT 12,270,920 (12,641) (36,599) 1,632,224 0 (1,971,806) CAVE CREEK MARSHALS 145,035 (149) 0 13,184 0 0 CENTRAL AZ. COLLEGE POLICE DEPT. 470,174 (484) 0 55,795 0 (44,926) CENTRAL YAVAPAI FIRE DISTRICT 18,577,089 (19,138) 386,600 1,453,595 146,882 (1,693,380) CHANDLER FIRE DEPARTMENT 53,526,394 (55,142) 433,631 2,573,860 648,431 (2,907,377) CHANDLER POLICE DEPARTMENT 79,793,221 (82,202) 703,394 6,155,142 0 (5,554,472) CHINO VALLEY FIRE DISTRICT 6,176,742 (6,363) 140,505 308,503 28,244 (345,991) CHINO VALLEY POLICE DEPARTMENT 3,288,901 (3,388) 60,498 243,794 0 (313,564) CHRISTOPHER-KOHL'S FIRE DISTRICT 277,756 (286) 0 18,500 5,689 (12,684) CITY OF MARICOPA - FIRE 7,253,006 (7,472) (168,752) 564,051 0 (34,354) CITY OF MARICOPA (POLICE DEPT.) 5,120,243 (5,275) (2,311) 508,701 0 (105,051) CLARKDALE FIRE DISTRICT 628,540 (648) 43,840 51,569 8,165 (8,558) CLARKDALE POLICE DEPARTMENT 1,481,693 (1,526) 0 92,061 0 (142,606) CLIFTON FIRE DEPARTMENT 106,774 (110) 0 20,000 0 (29,974)
162 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
AK CHIN INDIAN COMM. FIRE DEPT. 0 0 181,743 (4,824) 4,139,767 1,470,928 AK CHIN INDIAN COMM. POLICE DEPT. 0 (123) 92,777 (2,652) 2,150,913 255,877 APACHE COUNTY SHERIFF'S DEPT. 0 (206) 127,091 (3,473) 2,467,239 9,543,922 APACHE JUNCTION FIRE DISTRICT (76,684) 0 857,371 (21,306) 18,517,030 7,542,219 APACHE JUNCTION POLICE DEPARTMENT 0 (75) 405,989 (10,283) 8,629,506 18,424,773 ARIZONA STATE PARK RANGERS (242,335) 0 335,469 (10,913) 7,406,729 5,773,956 ASU PD PSPRS LOCAL BOARD 0 (82,712) 524,243 (15,523) 11,753,837 14,793,470 ATTORNEY GENERAL INVESTIGATORS 0 0 141,520 (6,135) 3,521,685 12,661,602 AVONDALE FIRE DEPARTMENT 0 0 585,392 (14,673) 12,627,183 3,631,423 AVONDALE POLICE DEPARTMENT 0 (49,367) 689,299 (17,204) 14,499,024 9,786,844 AVRA VALLEY FIRE DISTRICT 0 0 116,873 (3,235) 2,685,724 21,172 AZ DPT. LIQ. LIC. & CONTROL INVST 0 0 134,368 (6,101) 2,962,610 6,435,893 BENSON FIRE DEPARTMENT 0 0 15,227 (764) 347,785 78,696 BENSON POLICE DEPARTMENT 0 0 73,063 (2,156) 1,560,313 1,884,534 BISBEE FIRE DEPARTMENT (208,694) (3,777) 26,028 (941) (53,304) 9,846,985 BISBEE POLICE DEPARTMENT (294,414) (46,890) 56,297 (1,737) 740,163 7,824,276 BLACK CANYON FIRE DISTRICT 0 0 27,909 (1,063) 592,213 (129,470) BUCKEYE FIRE DEPARTMENT 0 0 546,165 (13,716) 11,522,164 1,074,009 BUCKEYE POLICE DEPARTMENT 0 (17,256) 534,404 (13,427) 11,230,178 7,408,213 BUCKEYE VALLEY FIRE DISTRICT 0 (55,648) 302,803 (7,776) 6,314,551 (593,216) BUCKSKIN FIRE DISTRICT 0 0 64,214 (1,953) 1,282,389 3,906,836 BULLHEAD CITY FIRE DEPARTMENT (604,225) (244) 974,048 (24,149) 22,034,188 11,022,562 BULLHEAD CITY POLICE DEPARTMENT (241,441) (282,227) 734,235 (18,296) 15,948,274 17,363,786 CAMP VERDE FIRE DISTRICT 0 0 176,683 (4,698) 3,883,313 1,223,851 CAMP VERDE MARSHALL'S 0 0 110,474 (3,075) 2,561,010 1,829,814 CASA GRANDE FIRE DEPARTMENT 0 0 494,059 (12,443) 10,502,032 10,854,513 CASA GRANDE POLICE DEPARTMENT 0 0 598,261 (14,978) 12,465,379 24,815,043 CAVE CREEK MARSHALS 0 0 7,887 (580) 165,376 40,772 CENTRAL AZ. COLLEGE POLICE DEPT. 0 0 23,496 (961) 503,093 344,025 CENTRAL YAVAPAI FIRE DISTRICT (1,034,848) 0 866,725 (21,531) 18,661,994 21,060,330 CHANDLER FIRE DEPARTMENT (706,942) 0 2,568,880 (63,063) 56,018,672 34,965,775 CHANDLER POLICE DEPARTMENT (12,963) (28,745) 3,873,466 (94,891) 84,751,949 71,559,235 CHINO VALLEY FIRE DISTRICT (63,947) (34) 291,423 (7,497) 6,521,584 3,309,379 CHINO VALLEY POLICE DEPARTMENT (112,598) (10,197) 149,207 (4,019) 3,298,634 2,394,965 CHRISTOPHER-KOHL'S FIRE DISTRICT 0 (334) 14,029 (727) 301,943 139,187 CITY OF MARICOPA - FIRE 0 (48,165) 387,128 (9,836) 7,935,605 (244,359) CITY OF MARICOPA (POLICE DEPT.) 0 (80,627) 270,249 (6,983) 5,698,946 63,075 CLARKDALE FIRE DISTRICT 0 0 36,689 (1,284) 758,313 27,881 CLARKDALE POLICE DEPARTMENT 0 (36,837) 63,547 (1,924) 1,454,407 1,288,737 CLIFTON FIRE DEPARTMENT 0 0 3,631 (443) 99,878 209,810
Comprehensive Annual Financial Report 163 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
CLIFTON POLICE DEPARTMENT 489,384 (504) 0 36,632 0 (29,362) COCHISE COUNTY SHERIFF'S DEPT 9,803,591 (10,100) 22,520 2,816,097 0 (2,549,916) COCONINO COUNTY SHERIFF'S DEPT 7,721,185 (7,954) 150,992 1,798,480 0 (2,399,477) COOLIDGE FIRE DEPARTMENT 236,656 (252) 0 22,601 13,334 0 COOLIDGE POLICE DEPARTMENT 3,877,870 (3,995) (2,729) 426,541 0 (484,369) CORONA DE TUCSON FIRE DISTRICT 1,467,474 (1,512) 60,036 137,302 16,721 (103,387) COTTONWOOD FIRE DEPARTMENT 3,277,722 (3,377) (29,587) 227,608 19,640 (127,375) COTTONWOOD POLICE DEPARTMENT 3,209,465 (3,306) (2,101) 601,731 0 (552,428) DAISY MOUNTAIN FIRE DISTRICT 13,677,717 (14,091) 124,896 765,386 111,763 (147,467) DEPARTMENT OF EMER & MILITARY AFF 6,100,250 (6,284) (26,559) 485,345 0 (580,891) DEPARTMENT OF PUBLIC SAFETY 329,059,441 (338,993) 2,946,833 40,328,223 0 (62,166,255) DESERT HILLS FIRE DEPARTMENT 1,183,313 (1,219) 0 136,884 10,203 (63,875) DOUGLAS FIRE DEPARTMENT 2,729,346 (2,812) 0 555,381 14,654 (923,685) DOUGLAS POLICE DEPARTMENT 4,897,638 (5,045) 57,400 730,718 0 (1,095,894) DREXEL HEIGHTS FIRE DISTRICT 13,260,913 (13,661) 164,497 642,946 59,777 (575,522) EAGAR POLICE DEPARTMENT 1,509,000 (1,555) 0 102,389 0 (181,203) EL MIRAGE FIRE DEPARTMENT 2,965,421 (3,055) 168,752 193,727 32,182 (141,470) EL MIRAGE POLICE DEPARTMENT 5,069,342 (5,222) 305,538 593,877 0 (422,942) ELOY FIRE DISTRICT 2,780,837 (2,865) (5,879) 240,763 18,899 0 ELOY POLICE DEPARTMENT 4,620,015 (4,759) (637) 284,427 0 (326,877) FLAGSTAFF FIRE DEPARTMENT 21,845,971 (22,505) 489,965 2,232,945 185,797 (3,888,411) FLAGSTAFF POLICE DEPARTMENT 17,257,665 (17,779) (58,664) 2,578,489 0 (3,298,299) FLORENCE FIRE DEPARTMENT 2,080,713 (2,144) 142,233 157,501 25,144 0 FLORENCE POLICE DEPARTMENT 3,500,709 (3,606) 76,119 225,441 0 (171,147) FORT MCDOWELL TRIBAL FIRE DEPT. 1,497,720 (1,543) 0 98,059 0 0 FORT MCDOWELL TRIBAL POLICE DEPT. 3,099,214 (3,193) 0 199,749 0 0 FORT MOJAVE MESA FIRE DISTRICT 6,936,970 (7,146) 156,057 445,589 25,062 (553,129) FORT MOJAVE TRIBAL POLICE DEPT. 1,882,888 (1,940) 0 176,095 0 0 FREDONIA MARSHALS 497,462 (512) 0 15,187 0 (28,875) FRY FIRE DISTRICT 6,403,712 (6,597) 22,271 800,517 35,378 (978,195) GAME AND FISH DEPARTMENT 21,372,661 (22,018) 481,314 4,200,219 0 (6,496,634) GILA COUNTY SHERIFF'S DEPARTMENT 4,881,433 (5,029) 40,559 641,694 0 (917,109) GILA RIVER FIRE DEPARTMENT 7,073,274 (7,287) (1,011) 559,281 0 (214,555) GILA RIVER POLICE DEPARTMENT 10,803,524 (11,130) (1,884) 895,009 0 (144,381) GILBERT FIRE DEPARTMENT 30,942,252 (31,876) (139,008) 1,273,957 571,425 (277,805) GILBERT POLICE DEPARTMENT 39,401,077 (40,591) 470,146 3,280,061 0 (2,106,154) GLENDALE FIRE DEPARTMENT 67,392,675 (69,427) 83,370 4,548,121 393,506 (4,735,943) GLENDALE POLICE DEPARTMENT 81,388,638 (83,846) 1,646,899 9,691,094 0 (8,890,707) GLOBE FIRE DEPARTMENT 2,729,344 (2,812) (71,769) 297,378 10,902 (408,889) GLOBE POLICE DEPARTMENT 2,818,500 (2,904) 2,339 349,032 0 (515,232)
164 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
CLIFTON POLICE DEPARTMENT 0 0 20,981 (881) 516,250 (150,080) COCHISE COUNTY SHERIFF'S DEPT 0 (51,396) 479,555 (12,070) 10,498,281 28,529,596 COCONINO COUNTY SHERIFF'S DEPT (341,137) 0 360,105 (9,163) 7,273,030 29,819,445 COOLIDGE FIRE DEPARTMENT 0 0 12,165 (687) 283,817 (142,790) COOLIDGE POLICE DEPARTMENT 0 0 180,905 (4,789) 3,989,433 5,585,299 CORONA DE TUCSON FIRE DISTRICT 0 0 77,150 (2,267) 1,651,517 659,059 COTTONWOOD FIRE DEPARTMENT 0 0 167,246 (4,470) 3,527,408 1,496,695 COTTONWOOD POLICE DEPARTMENT 0 0 167,936 (4,475) 3,416,822 7,596,131 DAISY MOUNTAIN FIRE DISTRICT 0 0 726,689 (18,120) 15,226,774 695,920 DEPARTMENT OF EMER & MILITARY AFF 0 (15,696) 289,526 (9,772) 6,235,919 6,587,244 DEPARTMENT OF PUBLIC SAFETY (8,246,787) (84,797) 12,866,614 (316,593) 314,047,685 648,587,994 DESERT HILLS FIRE DEPARTMENT 0 (25,472) 64,434 (1,960) 1,302,308 776,972 DOUGLAS FIRE DEPARTMENT 0 0 133,862 (3,626) 2,503,120 10,697,049 DOUGLAS POLICE DEPARTMENT 0 (66,478) 233,285 (6,060) 4,745,565 13,502,813 DREXEL HEIGHTS FIRE DISTRICT (8,703) 0 639,209 (15,979) 14,153,476 6,599,792 EAGAR POLICE DEPARTMENT 0 0 68,886 (2,058) 1,495,458 1,930,894 EL MIRAGE FIRE DEPARTMENT 0 (20,897) 159,295 (4,277) 3,349,678 952,712 EL MIRAGE POLICE DEPARTMENT (87,381) 0 273,401 (7,057) 5,719,557 5,543,162 ELOY FIRE DISTRICT 0 (13,148) 145,142 (3,930) 3,159,820 1,108,073 ELOY POLICE DEPARTMENT 0 0 225,871 (5,892) 4,792,148 3,105,262 FLAGSTAFF FIRE DEPARTMENT (1,705,625) 0 963,491 (23,873) 20,077,755 41,384,054 FLAGSTAFF POLICE DEPARTMENT 0 (81,422) 821,133 (20,411) 17,180,713 37,386,223 FLORENCE FIRE DEPARTMENT 0 (561) 122,465 (3,377) 2,521,975 (434,069) FLORENCE POLICE DEPARTMENT 0 0 167,656 (4,474) 3,790,698 493,981 FORT MCDOWELL TRIBAL FIRE DEPT. 0 (26,386) 79,731 (2,330) 1,645,250 26,405 FORT MCDOWELL TRIBAL POLICE DEPT. 0 0 160,647 (4,304) 3,452,113 109,286 FORT MOJAVE MESA FIRE DISTRICT (132,485) (5,039) 310,528 (7,964) 7,168,442 5,993,210 FORT MOJAVE TRIBAL POLICE DEPT. 0 0 102,258 (2,883) 2,156,418 (671,419) FREDONIA MARSHALS 0 0 21,229 (889) 503,602 (10,470) FRY FIRE DISTRICT 0 0 301,225 (7,735) 6,570,576 11,054,729 GAME AND FISH DEPARTMENT (1,295,632) 0 993,066 (26,864) 19,206,111 76,779,814 GILA COUNTY SHERIFF'S DEPARTMENT (105,472) 0 230,228 (5,984) 4,760,320 10,347,818 GILA RIVER FIRE DEPARTMENT 0 (22,752) 374,812 (9,531) 7,752,233 1,138,721 GILA RIVER POLICE DEPARTMENT 0 (17,316) 588,796 (14,752) 12,097,867 (977,239) GILBERT FIRE DEPARTMENT 0 0 1,653,304 (40,728) 33,951,520 7,046,901 GILBERT POLICE DEPARTMENT (134,050) (51,907) 2,037,534 (50,099) 42,806,017 28,813,997 GLENDALE FIRE DEPARTMENT (1,145,807) (57,117) 3,188,786 (78,182) 69,519,981 56,479,221 GLENDALE POLICE DEPARTMENT (2,112,708) (40,627) 4,022,993 (98,537) 85,523,200 119,750,742 GLOBE FIRE DEPARTMENT 0 0 125,014 (3,433) 2,675,737 4,364,852 GLOBE POLICE DEPARTMENT (19,688) (267) 132,063 (3,595) 2,760,248 6,017,960
Comprehensive Annual Financial Report 165 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
GOLDEN SHORES FIRE DISTRICT 792,856 (817) 0 41,505 3,277 0 GOLDEN VALLEY FIRE DISTRICT 2,767,588 (2,851) 0 227,363 12,727 (156,120) GOLDER RANCH FIRE DISTRICT 18,169,944 (18,718) 97,609 1,227,101 235,024 (549,577) GOODYEAR FIRE DEPARTMENT 14,819,085 (15,266) 429,732 773,563 195,163 (223,685) GOODYEAR POLICE DEPARTMENT 14,793,913 (15,241) (14,291) 1,173,950 0 (811,403) GRAHAM COUNTY SHERIFF'S DEPT. 2,598,352 (2,677) (11,032) 193,270 0 (185,960) GREEN VALLEY FIRE DISTRICT 11,709,646 (12,063) 135,927 533,424 104,448 (681,151) GREENLEE CNTY ATTY INVESTIGATORS 49,581 (51) 0 0 0 0 GREENLEE COUNTY SHERIFF'S DEPT. 2,599,962 (2,678) 104,269 165,012 0 (172,679) GROOM CREEK FIRE DISTRICT 503,219 (518) 0 40,218 3,864 0 GUADALUPE FIRE DEPARTMENT 510,551 (526) 0 55,055 3,357 (48,359) HARQUAHALA FIRE DISTRICT 860,528 (887) 0 71,247 0 0 HAYDEN POLICE DEPARTMENT 1,112,012 (1,146) 1,828 95,963 0 0 HEBER-OVERGAARD FIRE DISTRICT 1,367,715 (1,409) 0 86,671 22,125 (23,988) HELLSGATE FIRE DISTRICT 1,275,323 (1,314) 195,504 65,733 6,221 (57,904) HIGHLANDS FIRE DISTRICT 3,445,528 (3,550) 217,439 294,605 26,614 (277,260) HOLBROOK POLICE DEPARTMENT 1,409,596 (1,452) (13,365) 307,328 0 (492,986) HUACHUCA CITY POLICE DEPARTMENT 231,800 (251) 23,911 66,642 0 0 HUALAPAI INDIAN TRIBE POLICE DEPT 1,171,132 (1,206) 0 129,494 0 0 JEROME POLICE DEPARTMENT 261,293 (269) 0 18,279 0 0 KEARNY POLICE DEPARTMENT 1,472,944 (1,517) 39,983 35,137 0 (196,424) KINGMAN FIRE DEPARTMENT 11,258,566 (11,598) 297,632 590,591 49,579 (808,051) KINGMAN POLICE DEPARTMENT 9,164,676 (9,441) 0 796,097 0 (1,067,332) LA PAZ COUNTY ATTY. INVESTIGATORS 214,449 (221) 0 0 0 (31,210) LA PAZ COUNTY SHERIFF'S DEPT. 4,514,857 (4,651) 162,771 537,234 0 (885,837) LAKE HAVASU CITY FIRE DEPARTMENT 15,842,235 (16,321) 186,712 1,370,083 176,356 (2,103,054) LAKE HAVASU CITY POLICE DEPT. 16,069,590 (16,555) 610,340 1,567,440 0 (2,051,491) LAKE MOHAVE RANCHOS FIRE DISTRICT 840,225 (866) 0 42,468 4,927 (87,715) MAMMOTH POLICE DEPARTMENT 244,738 (252) 0 15,235 0 (17,267) MARANA POLICE DEPARTMENT 10,883,759 (11,212) 186,992 1,006,859 0 (914,123) MARICOPA CNTY ATTY INVESTIGATORS 3,534,891 (3,642) 0 1,077,456 0 (815,133) MARICOPA COUNTY PARK RANGERS 1,649,638 (1,699) 0 0 0 (186,819) MARICOPA COUNTY SHERIFF'S OFFICE 143,295,562 (147,622) 1,943,242 19,300,393 0 (20,629,752) MAYER FIRE DISTRICT 2,183,321 (2,249) 73,956 113,366 5,464 (127,989) MESA FIRE DEPARTMENT 129,273,174 (133,176) 1,950,872 8,949,974 877,978 (12,743,317) MESA POLICE DEPARTMENT 218,935,862 (225,545) 3,778,255 19,680,325 0 (24,708,928) MIAMI POLICE DEPARTMENT 703,148 (724) 0 73,750 0 (68,983) MOHAVE COUNTY SHERIFF'S DEPT. 14,939,797 (15,391) 527,529 1,232,825 0 (1,513,731) MOHAVE VALLEY FIRE DISTRICT 4,757,318 (4,901) 141,209 185,211 14,297 (164,438) MONTEZUMA RIMROCK FIRE DISTRICT 968,454 (998) (5,673) 80,139 6,303 (61,449)
166 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
GOLDEN SHORES FIRE DISTRICT 0 (33,792) 40,896 (1,388) 842,537 (168,879) GOLDEN VALLEY FIRE DISTRICT 0 0 137,650 (3,743) 2,982,613 1,741,933 GOLDER RANCH FIRE DISTRICT (116,921) 0 916,962 (22,759) 19,938,665 8,807,665 GOODYEAR FIRE DEPARTMENT (361,043) (43,942) 791,715 (19,707) 16,345,614 1,839,335 GOODYEAR POLICE DEPARTMENT 0 (136,215) 739,152 (18,421) 15,711,444 9,272,602 GRAHAM COUNTY SHERIFF'S DEPT. 0 (34,831) 125,056 (3,429) 2,678,750 2,448,117 GREEN VALLEY FIRE DISTRICT (357,040) (46,082) 518,497 (13,037) 11,892,569 5,838,596 GREENLEE CNTY ATTY INVESTIGATORS 0 0 1,817 (444) 50,903 (50,278) GREENLEE COUNTY SHERIFF'S DEPT. 0 0 120,579 (3,316) 2,811,147 1,700,285 GROOM CREEK FIRE DISTRICT 0 0 27,087 (1,049) 572,820 (138,821) GUADALUPE FIRE DEPARTMENT 0 0 29,544 (1,107) 548,514 608,579 HARQUAHALA FIRE DISTRICT 0 0 47,077 (1,536) 976,429 (313,740) HAYDEN POLICE DEPARTMENT 0 (432) 48,444 (1,569) 1,255,100 (930,130) HEBER-OVERGAARD FIRE DISTRICT 0 0 68,371 (2,052) 1,517,431 (203,802) HELLSGATE FIRE DISTRICT (254,826) 0 61,074 (1,879) 1,287,931 425,685 HIGHLANDS FIRE DISTRICT 0 0 171,340 (4,568) 3,870,148 2,795,053 HOLBROOK POLICE DEPARTMENT 0 (4,719) 64,270 (1,927) 1,266,745 5,870,052 HUACHUCA CITY POLICE DEPARTMENT 0 0 13,985 (727) 335,360 226,314 HUALAPAI INDIAN TRIBE POLICE DEPT 0 (43,782) 65,378 (1,985) 1,319,031 (274,959) JEROME POLICE DEPARTMENT 0 0 13,372 (707) 291,968 (117,622) KEARNY POLICE DEPARTMENT 0 0 55,938 (1,755) 1,404,306 565,773 KINGMAN FIRE DEPARTMENT (724,170) 0 517,476 (13,008) 11,157,017 9,190,021 KINGMAN POLICE DEPARTMENT 0 (117,379) 420,465 (10,641) 9,176,445 10,871,421 LA PAZ COUNTY ATTY. INVESTIGATORS 0 0 7,335 (558) 189,796 103,326 LA PAZ COUNTY SHERIFF'S DEPT. (14,009) (50,146) 197,454 (5,190) 4,452,483 8,805,365 LAKE HAVASU CITY FIRE DEPARTMENT (736,173) (40,120) 721,120 (17,967) 15,382,870 23,869,280 LAKE HAVASU CITY POLICE DEPT. (1,750,887) (30,560) 732,631 (18,256) 15,112,253 24,029,260 LAKE MOHAVE RANCHOS FIRE DISTRICT 0 (11,569) 34,449 (1,220) 820,700 370,363 MAMMOTH POLICE DEPARTMENT 0 (142) 12,307 (665) 253,953 266,109 MARANA POLICE DEPARTMENT 0 (23,795) 533,938 (13,410) 11,649,009 9,109,376 MARICOPA CNTY ATTY INVESTIGATORS 0 (44,678) 162,028 (4,332) 3,906,591 6,858,325 MARICOPA COUNTY PARK RANGERS 0 0 58,207 (1,809) 1,517,518 775,504 MARICOPA COUNTY SHERIFF'S OFFICE (3,191,304) (166,873) 6,829,419 (166,999) 147,066,067 235,074,082 MAYER FIRE DISTRICT 0 0 111,393 (3,107) 2,354,155 579,608 MESA FIRE DEPARTMENT (4,410,783) (84,615) 5,878,017 (143,794) 129,414,330 135,439,919 MESA POLICE DEPARTMENT (4,824,921) (190,886) 10,064,870 (245,947) 222,263,085 263,933,801 MIAMI POLICE DEPARTMENT 0 (100) 34,927 (1,230) 740,787 904,827 MOHAVE COUNTY SHERIFF'S DEPT. (292,000) (37,347) 708,906 (17,672) 15,532,917 18,110,829 MOHAVE VALLEY FIRE DISTRICT 0 (48,684) 220,773 (5,766) 5,095,018 (107,068) MONTEZUMA RIMROCK FIRE DISTRICT 0 (259) 46,827 (1,528) 1,031,816 630,305
Comprehensive Annual Financial Report 167 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
MOUNT LEMMON FIRE DISTRICT 491,510 (506) 0 23,691 4,747 0 NAU CAMPUS POLICE 2,587,215 (2,665) 190,989 443,105 0 (557,282) NAVAJO COUNTY ATTY'S INVESTIGATOR 36,134 (37) 0 20,181 0 (35,451) NAVAJO COUNTY SHERIFF'S DEPT. 3,883,289 (4,001) (12,070) 790,385 0 (1,109,711) NOGALES FIRE DEPARTMENT 6,553,134 (6,751) 65,719 585,262 0 (689,053) NOGALES POLICE DEPARTMENT 9,505,178 (9,792) 298,113 754,068 0 (888,380) NORTHERN AZ. CONSOLIDATED FD #1 3,191,631 (3,288) 59,171 240,869 22,028 (178,163) NORTHWEST FIRE DISTRICT 34,082,903 (35,112) 447,418 2,116,450 282,404 (1,135,999) ORACLE FIRE DISTRICT 358,685 (370) 0 28,458 5,448 0 ORO VALLEY POLICE DEPT. 17,386,107 (17,911) 253,924 1,669,125 0 (1,008,840) PAGE FIRE DEPARTMENT 1,125,725 (1,160) 0 89,023 18,691 (77,017) PAGE POLICE DEPARTMENT 2,812,136 (2,897) 25,049 201,140 0 (331,953) PALOMINAS FIRE DISTRICT 347,446 (358) (22,271) 37,612 0 0 PARADISE VALLEY POLICE DEPARTMENT 5,017,336 (5,169) 366,567 1,708,529 0 (1,762,670) PARKER POLICE DEPARTMENT 1,614,753 (1,664) 73,509 105,408 0 (130,387) PASCUA YAQUI TRIBE FIRE DEPT. 2,789,540 (2,874) 0 277,934 0 (49,470) PASCUA YAQUI TRIBE POLICE DEPT. 3,523,182 (3,630) (23,911) 389,820 0 (146,136) PATAGONIA MARSHALS 507,367 (523) 0 53,850 0 (70,533) PAYSON FIRE DEPARTMENT 4,137,439 (4,262) 170,132 307,321 46,055 (426,725) PAYSON POLICE DEPARTMENT 3,877,545 (3,995) (12,983) 633,668 0 (866,131) PEORIA FIRE DEPARTMENT 35,360,635 (36,428) 360,485 1,517,110 349,255 (1,215,002) PEORIA POLICE DEPARTMENT 39,499,408 (40,692) 450,575 3,254,563 0 (3,501,246) PHOENIX FIRE DEPARTMENT 537,642,081 (553,873) 4,560,326 39,800,464 3,275,258 (59,372,999) PHOENIX POLICE DEPARTMENT 947,643,379 (976,252) 13,859,302 80,310,547 0 (117,582,614) PICTURE ROCKS FIRE DISTRICT 3,035,058 (3,127) 61,119 89,286 0 (276,795) PIMA COUNTY ATTORNEY INVESTIGATOR 1,435,493 (1,479) 0 137,244 0 (227,680) PIMA COUNTY COMM. COLLEGE POLICE 3,871,940 (3,989) (43) 428,624 0 (491,286) PIMA COUNTY SHERIFF'S DEPARTMENT 122,138,197 (125,825) 861,155 12,611,941 0 (16,945,909) PIMA POLICE DEPARTMENT 332,363 (342) 0 19,766 0 0 PINAL COUNTY SHERIFF'S DEPARTMENT 33,052,041 (34,050) 305,908 2,916,562 0 (3,632,897) PINE-STRAWBERRY FIRE DISTRICT 3,027,736 (3,119) 90,685 197,021 16,836 (254,073) PINETOP FIRE DISTRICT 3,507,619 (3,614) (7,851) 336,991 36,293 (296,271) PINETOP-LAKESIDE POLICE DEPT. 1,410,551 (1,453) (754) 274,652 0 (369,607) PINEWOOD FIRE DISTRICT 1,590,678 (1,639) 44,348 206,034 15,749 (175,072) PONDEROSA FIRE DISTRICT 19,152 (22) 0 17,732 0 0 PRESCOTT FIRE DEPARTMENT 12,809,504 (13,196) 529,103 2,933,136 149,937 (3,226,950) PRESCOTT POLICE DEPARTMENT 8,509,596 (8,766) 146,953 2,003,868 0 (2,796,845) PRESCOTT VALLEY POLICE DEPARTMENT 10,215,941 (10,524) 560,708 653,581 0 (752,513) QUARTZSITE FIRE DISTRICT 732,906 (755) 0 46,638 8,535 0 QUARTZSITE POLICE DEPARTMENT 2,534,110 (2,611) 90,729 53,532 0 (162,302)
168 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
MOUNT LEMMON FIRE DISTRICT 0 0 24,240 (977) 542,704 (82,474) NAU CAMPUS POLICE (137,876) (5,122) 125,761 (3,438) 2,640,687 6,205,896 NAVAJO COUNTY ATTY'S INVESTIGATOR 0 0 744 (308) 21,263 543,379 NAVAJO COUNTY SHERIFF'S DEPT. 0 0 191,904 (5,044) 3,734,753 11,634,824 NOGALES FIRE DEPARTMENT 0 0 331,913 (8,477) 6,831,746 8,905,008 NOGALES POLICE DEPARTMENT 0 0 457,113 (11,527) 10,104,773 10,571,666 NORTHERN AZ. CONSOLIDATED FD #1 (179,887) 0 158,727 (4,260) 3,306,827 2,634,511 NORTHWEST FIRE DISTRICT (925,677) 0 1,691,663 (41,661) 36,482,389 16,920,576 ORACLE FIRE DISTRICT 0 0 19,642 (866) 410,998 (78,501) ORO VALLEY POLICE DEPT. 0 (8,578) 874,562 (21,722) 19,126,667 12,554,791 PAGE FIRE DEPARTMENT 0 0 58,052 (1,804) 1,211,511 484,893 PAGE POLICE DEPARTMENT 0 (79,267) 123,864 (3,384) 2,744,688 2,944,450 PALOMINAS FIRE DISTRICT 0 0 15,798 (764) 377,462 (223,424) PARADISE VALLEY POLICE DEPARTMENT 0 (579) 307,573 (7,885) 5,623,702 21,030,884 PARKER POLICE DEPARTMENT (9,615) 0 76,660 (2,247) 1,726,417 1,326,494 PASCUA YAQUI TRIBE FIRE DEPT. 0 0 144,800 (3,918) 3,156,012 2,129,248 PASCUA YAQUI TRIBE POLICE DEPT. 0 0 184,564 (4,890) 3,918,999 2,951,408 PATAGONIA MARSHALS 0 0 20,805 (889) 510,077 586,832 PAYSON FIRE DEPARTMENT 0 0 201,717 (5,309) 4,426,368 3,668,553 PAYSON POLICE DEPARTMENT 0 0 189,110 (4,995) 3,812,219 10,862,978 PEORIA FIRE DEPARTMENT (734,878) 0 1,710,692 (42,126) 37,269,742 16,380,492 PEORIA POLICE DEPARTMENT (1,185,566) (27,508) 1,821,818 (44,835) 40,226,518 40,615,487 PHOENIX FIRE DEPARTMENT (12,934,159) (122,145) 24,512,553 (598,434) 536,209,073 685,964,945 PHOENIX POLICE DEPARTMENT (22,858,488) (863,812) 43,559,530 (1,063,140) 942,028,452 1,318,574,890 PICTURE ROCKS FIRE DISTRICT 0 (60,271) 128,941 (3,527) 2,970,685 1,571,131 PIMA COUNTY ATTORNEY INVESTIGATOR (204,317) 0 54,696 (1,709) 1,192,248 2,088,953 PIMA COUNTY COMM. COLLEGE POLICE 0 0 183,591 (4,853) 3,983,984 5,178,228 PIMA COUNTY SHERIFF'S DEPARTMENT (2,149,482) (41,638) 5,052,583 (123,651) 121,277,371 183,012,537 PIMA POLICE DEPARTMENT 0 0 14,929 (743) 365,972 (280,327) PINAL COUNTY SHERIFF'S DEPARTMENT (66,741) (246,140) 1,577,624 (38,872) 33,833,436 34,244,196 PINE-STRAWBERRY FIRE DISTRICT (282,041) 0 146,241 (3,951) 2,935,334 2,474,406 PINETOP FIRE DISTRICT 0 0 174,868 (4,655) 3,743,381 3,379,905 PINETOP-LAKESIDE POLICE DEPT. 0 0 69,641 (2,081) 1,380,951 4,372,409 PINEWOOD FIRE DISTRICT 0 0 85,385 (2,477) 1,763,007 1,791,215 PONDEROSA FIRE DISTRICT 0 0 1,916 (421) 38,357 (12,998) PRESCOTT FIRE DEPARTMENT (429,070) 0 619,579 (16,431) 13,355,613 35,773,094 PRESCOTT POLICE DEPARTMENT (171,613) 0 425,319 (10,753) 8,097,758 34,668,164 PRESCOTT VALLEY POLICE DEPARTMENT (74,968) (117) 496,084 (12,489) 11,075,702 6,592,682 QUARTZSITE FIRE DISTRICT 0 0 38,059 (1,315) 824,067 65,847 QUARTZSITE POLICE DEPARTMENT 0 (26,275) 101,814 (2,869) 2,586,127 (88,573)
Comprehensive Annual Financial Report 169 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
QUEEN CREEK FIRE DEPARTMENT 1,609,391 (1,658) (23,337) 1,729,329 77,771 (129,228) QUEEN VALLEY FIRE DISTRICT 159,058 (164) 0 15,997 1,304 0 RINCON VALLEY FIRE DISTRICT 2,905,696 (2,993) 1,524 214,508 32,995 (67,006) RIO RICO FIRE DISTRICT 2,444,947 (2,519) 1,381 162,892 15,783 (16,589) RIO VERDE FIRE DISTRICT 3,170,418 (3,266) 117,679 248,463 0 (51,036) SAFFORD POLICE DEPARTMENT 2,851,860 (2,938) 0 524,986 0 (623,061) SAHUARITA POLICE DEPARTMENT 5,398,119 (5,561) 0 468,919 0 (37,716) SALT RIVER PIMA-MARICOPA FIRE 15,435,270 (15,901) (20,976) 990,576 0 (529,037) SALT RIVER PIMA-MARICOPA POLICE 13,883,371 (14,303) 135,593 1,236,266 0 (763,001) SAN CARLOS TRIBAL POLICE DEPT. 2,091,182 (2,154) (7,678) 183,572 0 0 SAN LUIS FIRE DEPARTMENT 2,669,890 (2,750) 53,789 189,618 18,624 (41,612) SAN LUIS POLICE DEPARTMENT 3,711,443 (3,823) 0 248,515 0 (226,878) SANTA CRUZ COUNTY SHERIFF'S DEPT. 4,373,934 (4,506) (41,852) 512,953 0 (684,781) SCOTTSDALE FIRE DEPARTMENT 35,977,190 (37,063) 596,110 711,088 1,535,902 (572,738) SCOTTSDALE POLICE DEPARTMENT 109,705,074 (113,017) 2,533,753 8,970,204 0 (11,158,371) SEDONA FIRE DISTRICT 12,917,743 (13,308) 60,316 1,000,419 135,346 (937,611) SEDONA POLICE DEPARTMENT 4,252,460 (4,381) 2,101 396,718 0 (387,285) SHOW LOW POLICE DEPARTMENT 4,694,646 (4,836) 75,444 495,177 0 (514,643) SIERRA VISTA FIRE DEPARTMENT 10,818,743 (11,145) 193,766 622,501 91,761 (1,021,898) SIERRA VISTA POLICE DEPARTMENT 10,956,980 (11,288) 38,098 1,231,440 0 (1,718,654) SNOWFLAKE POLICE DEPARTMENT 1,472,867 (1,517) 82,949 189,537 0 (223,809) SOMERTON FIRE DEPARTMENT 1,938,322 (1,997) 0 145,826 10,011 (124,729) SOMERTON POLICE DEPARTMENT 2,464,844 (2,539) 46,428 166,006 0 (100,359) SONOITA ELGIN FIRE DEPARTMENT 493,867 (509) (16,788) 46,674 10,833 0 SOUTH TUCSON FIRE DEPARTMENT 1,219,432 (1,256) 0 84,561 0 (214,223) SOUTH TUCSON POLICE DEPARTMENT (331,512) 342 0 412,532 0 (551,060) SPRINGERVILLE POLICE DEPARTMENT 1,341,395 (1,382) 0 59,564 0 (94,232) ST. JOHNS POLICE DEPARTMENT 806,767 (831) 13,858 34,397 0 (59,204) SUMMIT FIRE DISTRICT 5,889,466 (6,067) 173,046 312,391 28,986 (223,585) SUN CITY FIRE DISTRICT 13,894,140 (14,314) 307,357 1,148,183 85,272 (1,369,107) SUN CITY WEST FIRE DISTRICT 11,900,106 (12,259) 67,644 949,754 111,438 (663,822) SUN LAKES FIRE DISTRICT 9,947,915 (10,248) 212,662 591,908 60,880 (504,905) SUN SITES PEARCE FIRE DISTRICT 331,087 (352) 0 30,828 3,532 0 SUPERIOR POLICE DEPARTMENT 738,451 (761) 111,677 67,338 0 (85,900) SURPRISE FIRE DEPARTMENT 18,462,514 (19,020) 118,755 1,113,685 281,065 (481,494) SURPRISE POLICE DEPARTMENT 18,107,277 (18,654) 586,002 1,729,946 0 (949,940) TEMPE FIRE DEPARTMENT 58,151,773 (59,907) 418,183 4,040,738 512,555 (6,792,189) TEMPE POLICE DEPARTMENT 78,480,493 (80,850) 1,607,326 9,804,542 0 (11,964,884) THATCHER POLICE DEPARTMENT 1,844,502 (1,900) 11,032 235,104 0 (263,800) THREE POINTS FIRE DISTRICT 1,603,280 (1,652) 0 147,133 12,688 (108,900)
170 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
QUEEN CREEK FIRE DEPARTMENT 0 0 110,386 (3,085) 3,369,569 1,461,622 QUEEN VALLEY FIRE DISTRICT 0 0 8,956 (602) 184,548 20,356 RINCON VALLEY FIRE DISTRICT 0 0 155,490 (4,181) 3,236,032 29,465 RIO RICO FIRE DISTRICT 0 (12,394) 129,350 (3,542) 2,719,310 (452,753) RIO VERDE FIRE DISTRICT 0 0 161,455 (4,330) 3,639,383 866,976 SAFFORD POLICE DEPARTMENT 0 0 146,777 (3,957) 2,893,666 7,912,295 SAHUARITA POLICE DEPARTMENT 0 (5,633) 273,195 (7,054) 6,084,269 102,371 SALT RIVER PIMA-MARICOPA FIRE 0 (7,144) 750,980 (18,712) 16,585,056 5,218,043 SALT RIVER PIMA-MARICOPA POLICE (86,736) (230,390) 702,508 (17,528) 14,845,780 7,423,934 SAN CARLOS TRIBAL POLICE DEPT. 0 (86,209) 104,048 (2,923) 2,279,837 663,607 SAN LUIS FIRE DEPARTMENT 0 (295) 138,174 (3,755) 3,021,684 118,378 SAN LUIS POLICE DEPARTMENT 0 (93,038) 179,881 (4,770) 3,811,330 2,122,912 SANTA CRUZ COUNTY SHERIFF'S DEPT. 0 (41,478) 213,595 (5,585) 4,322,280 8,650,313 SCOTTSDALE FIRE DEPARTMENT (117,180) (23) 2,046,600 (50,325) 40,089,562 (5,534,083) SCOTTSDALE POLICE DEPARTMENT (3,027,635) (308,596) 5,113,560 (125,144) 111,589,827 111,779,006 SEDONA FIRE DISTRICT 0 (60,997) 638,219 (15,962) 13,724,165 10,577,512 SEDONA POLICE DEPARTMENT 0 0 193,322 (5,098) 4,447,837 3,598,698 SHOW LOW POLICE DEPARTMENT 0 0 225,276 (5,876) 4,965,188 5,719,028 SIERRA VISTA FIRE DEPARTMENT (582,998) (62,663) 469,999 (11,851) 10,506,216 10,511,118 SIERRA VISTA POLICE DEPARTMENT 0 (16,931) 516,861 (12,992) 10,983,515 19,120,648 SNOWFLAKE POLICE DEPARTMENT 0 (16,187) 72,784 (2,154) 1,574,470 2,236,128 SOMERTON FIRE DEPARTMENT 0 0 95,426 (2,711) 2,060,147 1,095,900 SOMERTON POLICE DEPARTMENT (131,031) 0 121,631 (3,347) 2,561,631 1,414,419 SONOITA ELGIN FIRE DEPARTMENT 0 (94,661) 22,753 (936) 461,232 82,140 SOUTH TUCSON FIRE DEPARTMENT 0 0 49,864 (1,594) 1,136,784 2,038,860 SOUTH TUCSON POLICE DEPARTMENT 0 0 4,804 (354) (465,249) 7,960,978 SPRINGERVILLE POLICE DEPARTMENT 0 0 58,728 (1,811) 1,362,262 761,494 ST. JOHNS POLICE DEPARTMENT 0 0 35,968 (1,256) 829,699 300,954 SUMMIT FIRE DISTRICT 0 0 291,993 (7,512) 6,458,719 1,836,901 SUN CITY FIRE DISTRICT (135,817) 0 700,311 (17,470) 14,598,555 18,811,515 SUN CITY WEST FIRE DISTRICT (260,240) 0 593,212 (14,864) 12,670,969 10,543,362 SUN LAKES FIRE DISTRICT (315,403) (166) 464,930 (11,734) 10,435,839 4,299,871 SUN SITES PEARCE FIRE DISTRICT 0 0 19,050 (856) 383,289 27,219 SUPERIOR POLICE DEPARTMENT 0 0 36,594 (1,263) 866,137 223,687 SURPRISE FIRE DEPARTMENT 0 0 956,696 (23,732) 20,408,468 5,403,530 SURPRISE POLICE DEPARTMENT 0 (121) 951,951 (23,613) 20,382,847 10,631,735 TEMPE FIRE DEPARTMENT (1,762,373) 0 2,537,356 (62,287) 56,983,848 74,261,102 TEMPE POLICE DEPARTMENT (2,501,505) (32,288) 3,769,779 (92,360) 78,990,255 145,715,708 THATCHER POLICE DEPARTMENT 0 (57,320) 89,394 (2,553) 1,854,460 3,326,893 THREE POINTS FIRE DISTRICT 0 0 81,630 (2,376) 1,731,803 838,137
Comprehensive Annual Financial Report 171 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB FIRE TAX PENSION PSPRS SYSTEM BALANCES PRIOR ADJ TRANSFERS RECEIVED RECEIVED PAYMENTS
TIMBER MESA FIRE AND MEDICAL DIST 7,155,373 (7,371) 79,369 396,791 79,979 (193,468) TOHONO O'ODHAM NATION FIRE DEPT. 4,783,190 (4,928) (998) 335,959 0 (17,248) TOHONO O'ODHAM NATION POLICE DEPT 13,844,555 (14,263) 111,760 720,262 0 (592,886) TOLLESON FIRE DEPARTMENT 5,407,705 (5,571) 0 372,971 28,682 (230,974) TOLLESON POLICE DEPARTMENT 3,496,262 (3,602) 94,469 454,309 0 (384,029) TOMBSTONE MARSHAL'S DEPARTMENT 641,574 (661) 0 10,686 0 0 TONOPAH VALLEY FIRE DISTRICT 508,399 (524) 0 61,215 0 0 TOWN OF SUPERIOR (FIRE DEPT) 403,599 (416) 0 23,591 0 (17,597) TRI-CITY FIRE DISTRICT 1,677,111 (1,728) 155,982 143,220 4,190 (57,756) TUBAC FIRE DISTRICT 3,300,989 (3,401) 0 193,611 22,708 (55,517) TUCSON AIRPORT AUTHORITY FIRE DPT 3,636,004 (3,746) (49,916) 527,805 0 (824,231) TUCSON AIRPORT AUTHORITY POLICE 2,946,755 (3,036) 70,964 614,539 0 (825,779) TUCSON FIRE 144,214,247 (148,568) 1,129,303 16,220,586 966,016 (27,106,026) TUCSON POLICE 247,541,202 (255,014) 3,814,571 26,978,551 0 (42,332,883) U OF A CAMPUS POLICE DEPARTMENT 9,087,876 (9,362) 91,125 953,734 0 (945,722) VERDE VALLEY FIRE DISTRICT 4,836,781 (4,983) 0 232,228 30,796 (204,825) WELLTON POLICE 512,040 (528) 47,255 47,562 0 (96,264) WHETSTONE FIRE DISTRICT 233,317 (240) 0 24,374 0 0 WICKENBURG FIRE DEPARTMENT 741,488 (764) 0 55,527 18,652 0 WICKENBURG POLICE DEPARTMENT 1,987,196 (2,047) 94,390 231,967 0 (344,348) WILLCOX POLICE DEPARTMENT 1,501,250 (1,547) (2,546) 193,052 0 (258,577) WILLIAMS POLICE DEPARTMENT 1,176,032 (1,212) (4,094) 88,900 0 (117,552) WILLIAMSON VALLEY FIRE DISTRICT 327,951 (338) 17,522 114,081 3,436 0 WINSLOW FIRE DEPARTMENT 5,608,167 (5,777) 0 30,084 6,778 (132,871) WINSLOW POLICE DEPARTMENT 4,194,658 (4,321) 72,599 243,243 0 (321,716) WITTMANN FIRE DISTRICT 539,241 (556) 0 55,066 8,301 0 YAVAPAI CNTY ATTRNY INVESTIGATORS (75,268) 78 0 8,301 0 (76,767) YAVAPAI COUNTY SHERIFF'S DEPT. 15,267,274 (15,728) 148,560 2,010,938 0 (2,449,007) YAVAPAI PRESCOTT TRIBAL POLICE 478,428 (493) 4,923 34,134 0 0 YOUNGTOWN POLICE DEPARTMENT 615,867 (634) (12,024) 35,339 0 (108,731) YUMA COUNTY SHERIFF'S DEPARTMENT 11,597,305 (11,947) 88,831 1,354,473 0 (1,483,347) YUMA FIRE DEPARTMENT 21,907,724 (22,569) 586,530 2,609,151 141,366 (3,771,737) YUMA POLICE DEPARTMENT 33,339,771 (34,346) 243,690 3,321,709 0 (4,825,244)
TOTALS 4,686,532,056 (4,828,048) 59,751,527 434,947,227 13,150,331 (560,333,924)
172 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
DROP ENHANCED DIST. OF DIST. OF 2015 2014 PSPRS SYSTEM PAYMENT REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
TIMBER MESA FIRE AND MEDICAL DIST 0 (68,530) 372,057 (10,226) 7,803,974 649,737 TOHONO O'ODHAM NATION FIRE DEPT. 0 (6,112) 239,080 (6,223) 5,322,722 (151,261) TOHONO O'ODHAM NATION POLICE DEPT 0 (7,449) 611,542 (15,310) 14,658,212 4,281,828 TOLLESON FIRE DEPARTMENT 0 0 289,531 (7,452) 5,854,892 2,396,354 TOLLESON POLICE DEPARTMENT 0 (59,653) 179,481 (4,761) 3,772,476 4,155,646 TOMBSTONE MARSHAL'S DEPARTMENT 0 0 29,457 (1,095) 679,960 (490,479) TONOPAH VALLEY FIRE DISTRICT 0 0 28,028 (1,063) 596,055 (252,907) TOWN OF SUPERIOR (FIRE DEPT) 0 0 18,586 (833) 426,930 (78,688) TRI-CITY FIRE DISTRICT 0 0 94,058 (2,681) 2,012,396 138,811 TUBAC FIRE DISTRICT 0 (30,797) 169,662 (4,524) 3,592,730 731,782 TUCSON AIRPORT AUTHORITY FIRE DPT 0 0 164,399 (4,385) 3,445,929 9,806,664 TUCSON AIRPORT AUTHORITY POLICE (183,027) 0 154,668 (4,150) 2,770,934 11,034,317 TUCSON FIRE (4,256,108) 0 6,307,289 (154,261) 137,172,479 297,073,214 TUCSON POLICE (11,537,409) (28,842) 10,553,615 (257,865) 234,475,926 465,901,131 U OF A CAMPUS POLICE DEPARTMENT (49,358) (210) 466,167 (14,165) 9,580,085 12,233,304 VERDE VALLEY FIRE DISTRICT 0 0 232,682 (6,062) 5,116,616 1,586,230 WELLTON POLICE 0 0 22,586 (923) 531,729 792,971 WHETSTONE FIRE DISTRICT 0 0 13,047 (701) 269,796 (108,852) WICKENBURG FIRE DEPARTMENT 0 0 39,780 (1,357) 853,325 (114,968) WICKENBURG POLICE DEPARTMENT (34,286) 0 91,892 (2,620) 2,022,144 2,800,955 WILLCOX POLICE DEPARTMENT 0 0 68,949 (2,059) 1,498,523 2,952,311 WILLIAMS POLICE DEPARTMENT 0 0 52,134 (1,647) 1,192,561 1,000,424 WILLIAMSON VALLEY FIRE DISTRICT 0 (11,480) 25,896 (1,018) 476,051 (94,938) WINSLOW FIRE DEPARTMENT 0 (619) 212,441 (5,566) 5,712,638 (2,845,849) WINSLOW POLICE DEPARTMENT (33,880) 0 193,154 (5,091) 4,338,646 3,379,515 WITTMANN FIRE DISTRICT 0 0 31,533 (1,157) 632,429 (47,231) YAVAPAI CNTY ATTRNY INVESTIGATORS 0 0 (3,918) (377) (147,951) 1,198,800 YAVAPAI COUNTY SHERIFF'S DEPT. 0 (50,430) 773,273 (19,247) 15,665,631 28,217,311 YAVAPAI PRESCOTT TRIBAL POLICE 0 (37,490) 23,080 (947) 501,635 (302,489) YOUNGTOWN POLICE DEPARTMENT 0 0 22,563 (919) 551,461 888,564 YUMA COUNTY SHERIFF'S DEPARTMENT 0 (17,420) 571,187 (14,313) 12,084,767 15,269,099 YUMA FIRE DEPARTMENT (617,254) (199) 1,040,382 (25,761) 21,847,632 40,310,568 YUMA POLICE DEPARTMENT (859,004) (99,415) 1,497,736 (36,917) 32,547,980 46,838,276
TOTALS (104,804,268) (5,542,326) 216,316,897 (5,386,939) 4,729,802,534 6,214,052,497
Comprehensive Annual Financial Report 173 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES FISCAL YEAR ENDED JUNE 30, 2015
2014 GASB 68 RESERVE CONTRIB PENSION DROP CORP PLAN BALANCES PRIOR ADJ TRANSFERS RECEIVED PAYMENTS PAYMENTS
ADMIN. OFFICE OF THE COURT (CORP-AOC) 238,403,288 (271,770) 5,410,286 16,560,621 (16,956,296) (2,174,688) APACHE COUNTY - CORP 970,664 (1,107) 0 59,845 (90,730) 0 CITY OF AVONDALE - DETENTION 695,955 (793) 7,517 49,425 (11,584) 0 CITY OF SOMERTON - DISPATCHERS 302,861 (345) 0 37,216 (32,389) 0 COCHISE COUNTY - CORP 3,650,771 (4,162) 62,745 268,393 (386,901) 0 COCONINO COUNTY - CORP 4,727,872 (5,390) 46,040 296,134 (211,791) 0 DEPARTMENT OF CORRECTIONS - CORP 570,699,122 (650,573) 11,583,885 43,105,415 (66,991,699) (1,149,918) DEPARTMENT OF PUBLIC SAFETY 6,293,935 (7,175) 69,087 283,620 (329,223) 0 DEPARTMENT OF PUBLIC SAFETY DETENTION (2,159) 2 0 5,382 0 0 DEPT OF JUVENILE CORRECTIONS-CORP 46,654,940 (53,185) 648,784 2,831,177 (6,423,929) 0 GILA COUNTY - CORP 2,698,234 (3,076) 0 181,989 (116,206) 0 GILA COUNTY - DISPATCHERS 1,027,116 (1,171) 100 30,530 (80,128) 0 GRAHAM COUNTY - DETENTION 1,376,255 (1,569) 7,039 74,587 (110,789) 0 GRAHAM COUNTY - DISPATCHERS 333,299 (380) 0 10,664 0 0 MARICOPA COUNTY - CORP 142,141,859 (162,036) 2,630,466 12,465,970 (12,787,421) (641,988) MOHAVE COUNTY - CORP 4,943,070 (5,635) 169,442 265,631 (212,087) 0 NAVAJO COUNTY - CORP 2,529,484 (2,884) 106,186 123,062 (169,272) 0 ORO VALLEY - DISPATCHERS 812,823 (927) 94,726 64,005 (71,409) 0 PIMA COUNTY - CORP 35,987,639 (41,024) 657,287 3,440,999 (4,959,841) 0 PINAL COUNTY - CORP 16,930,000 (19,299) 218,384 937,505 (701,364) 0 PINAL COUNTY - DISPATCHERS 937,872 (1,069) 0 61,894 (54,943) 0 SANTA CRUZ COUNTY - CORP 1,721,246 (1,962) 51,611 68,898 (102,577) 0 TOWN OF MARANA - DISPATCHERS 558,092 (636) 0 49,045 0 0 TOWN OF WICKENBURG-DISPATCHERS 316,508 (361) 163 19,780 (48,252) 0 YAVAPAI COUNTY - CORP 6,846,876 (7,805) 67,309 775,798 (776,867) 0 YAVAPAI COUNTY - DISPATCHERS 514,370 (586) (6,779) 24,321 (39,324) 0 YUMA COUNTY - CORP 8,817,896 (10,052) 142,029 485,516 (751,068) 0
TOTALS 1,100,889,886 (1,254,968) 21,966,304 82,577,422 (112,416,091) (3,966,594)
174 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN EMPLOYER RESERVE BALANCES AND UNFUNDED ACTUARIAL ACCRUED LIABILITIES (cont) FISCAL YEAR ENDED JUNE 30, 2015
ENHANCED DIST. OF DIST. OF 2015 2014 CORP PLAN REFUNDS EARNINGS ADMIN EXP BALANCES UAAL
ADMIN. OFFICE OF THE COURT (559,969) 11,804,089 (289,680) 251,925,881 221,431,155 APACHE COUNTY - CORP (15) 46,477 (1,505) 983,629 659,356 CITY OF AVONDALE - DETENTION 0 40,330 (1,388) 779,461 346,538 CITY OF SOMERTON - DISPATCHERS 0 16,191 (787) 322,748 558,536 COCHISE COUNTY - CORP (15,747) 182,577 (4,869) 3,752,808 3,559,958 COCONINO COUNTY - CORP (14,219) 246,544 (6,468) 5,078,722 2,129,808 DEPARTMENT OF CORRECTIONS - CORP (5,813,940) 28,414,320 (704,717) 578,491,895 612,852,923 DEPARTMENT OF PUBLIC SAFETY (80,872) 315,284 (10,643) 6,534,013 4,026,609 DEPARTMENT OF PUBLIC SAFETY DETENTION (167) 1,260 (2,810) 1,508 19,828 DEPT OF JUVENILE CORRECTIONS-CORP (369,377) 2,139,140 (55,494) 45,372,057 51,105,220 GILA COUNTY - CORP (82,408) 144,624 (3,947) 2,819,210 594,089 GILA COUNTY - DISPATCHERS 0 45,656 (1,505) 1,020,598 428,671 GRAHAM COUNTY - DETENTION (14,054) 67,673 (2,059) 1,397,084 433,171 GRAHAM COUNTY - DISPATCHERS 0 18,096 (835) 360,844 (76,216) MARICOPA COUNTY - CORP (1,161,886) 7,511,442 (185,964) 149,810,441 151,999,578 MOHAVE COUNTY - CORP (2,394) 243,014 (6,374) 5,394,668 (617,830) NAVAJO COUNTY - CORP (109,791) 120,952 (3,354) 2,594,382 560,297 ORO VALLEY - DISPATCHERS (38,721) 45,101 (1,490) 904,109 1,041,436 PIMA COUNTY - CORP (379,348) 1,765,695 (44,001) 36,427,405 51,522,268 PINAL COUNTY - CORP (894,770) 891,339 (22,404) 17,339,392 6,925,306 PINAL COUNTY - DISPATCHERS (44,518) 52,764 (1,670) 950,330 845,177 SANTA CRUZ COUNTY - CORP (4,661) 80,723 (2,361) 1,810,917 202,143 TOWN OF MARANA - DISPATCHERS (18,995) 34,230 (1,233) 620,503 415,685 TOWN OF WICKENBURG-DISPATCHERS 0 14,276 (721) 301,392 390,374 YAVAPAI COUNTY - CORP (245,086) 389,607 (9,992) 7,039,839 8,764,450 YAVAPAI COUNTY - DISPATCHERS (10,287) 24,701 (999) 505,418 343,947 YUMA COUNTY - CORP (290,984) 429,272 (10,977) 8,811,631 5,871,173
TOTALS (10,152,208) 55,085,378 (1,378,245) 1,131,350,884 1,126,333,650
Comprehensive Annual Financial Report 175 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
AK CHIN INDIAN COMM. FIRE DEPT. 126,905 14,740 (3,120) 4,854 (129) 143,250 AK CHIN INDIAN COMM. POLICE DEPT. 71,636 11,740 0 2,822 (81) 86,118 APACHE COUNTY SHERIFF'S DEPT. 253,796 25,206 (14,280) 9,549 (261) 274,010 APACHE JUNCTION FIRE DISTRICT 699,834 54,685 (8,830) 26,419 (657) 771,451 APACHE JUNCTION POLICE DEPARTMENT 650,465 49,149 (21,160) 24,318 (616) 702,156 ARIZONA STATE PARK RANGERS 560,952 40,571 (14,752) 21,065 (685) 607,151 ASU PD PSPRS LOCAL BOARD 858,156 70,998 (33,441) 32,201 (953) 926,961 ATTORNEY GENERAL INVESTIGATORS 300,292 55,492 (32,082) 11,472 (497) 334,677 AVONDALE FIRE DEPARTMENT 380,884 52,921 (7,820) 14,636 (367) 440,254 AVONDALE POLICE DEPARTMENT 617,692 68,626 (23,840) 23,504 (587) 685,395 AVRA VALLEY FIRE DISTRICT 133,768 12,085 0 5,105 (141) 150,817 AZ DPT. LIQ. LIC. & CONTROL INVST 98,463 21,363 (18,287) 3,682 (167) 105,054 BENSON FIRE DEPARTMENT 8,089 460 0 283 (14) 8,819 BENSON POLICE DEPARTMENT 138,484 9,665 (2,678) 5,196 (153) 150,514 BISBEE FIRE DEPARTMENT 217,080 11,663 (8,479) 8,037 (290) 228,011 BISBEE POLICE DEPARTMENT 151,208 15,038 (11,144) 5,625 (174) 160,553 BLACK CANYON FIRE DISTRICT 33,723 2,895 0 1,282 (49) 37,851 BUCKEYE FIRE DEPARTMENT 312,253 54,892 0 12,277 (308) 379,113 BUCKEYE POLICE DEPARTMENT 418,089 50,867 (1,550) 16,179 (406) 483,178 BUCKEYE VALLEY FIRE DISTRICT 237,796 27,351 0 9,143 (235) 274,054 BUCKSKIN FIRE DISTRICT 58,568 6,886 (1,927) 2,230 (68) 65,688 BULLHEAD CITY FIRE DEPARTMENT 1,096,161 61,311 (18,151) 40,879 (1,013) 1,179,188 BULLHEAD CITY POLICE DEPARTMENT 927,868 72,322 (33,697) 34,713 (865) 1,000,341 CAMP VERDE FIRE DISTRICT 150,137 12,734 0 5,721 (152) 168,441 CAMP VERDE MARSHALL'S 161,274 9,498 (6,330) 5,971 (166) 170,246 CASA GRANDE FIRE DEPARTMENT 366,815 41,681 (13,411) 13,854 (349) 408,591 CASA GRANDE POLICE DEPARTMENT 745,511 58,353 (24,070) 27,983 (701) 807,076 CAVE CREEK MARSHALS 6,456 752 0 250 (18) 7,439 CENTRAL AZ. COLLEGE POLICE DEPT. 18,877 2,902 0 742 (30) 22,490 CENTRAL YAVAPAI FIRE DISTRICT 902,318 72,053 (40,874) 33,623 (835) 966,285 CHANDLER FIRE DEPARTMENT 2,129,401 188,404 (81,393) 79,329 (1,947) 2,313,794 CHANDLER POLICE DEPARTMENT 3,424,650 350,708 (145,688) 129,265 (3,167) 3,755,769 CHINO VALLEY FIRE DISTRICT 265,256 23,554 (12,850) 9,885 (254) 285,591 CHINO VALLEY POLICE DEPARTMENT 219,610 16,950 (8,352) 8,205 (221) 236,192 CHRISTOPHER-KOHL'S FIRE DISTRICT 14,608 2,266 (900) 557 (29) 16,503 CITY OF MARICOPA - FIRE 227,472 31,426 (1,800) 8,838 (225) 265,712 CITY OF MARICOPA (POLICE DEPT.) 180,279 26,756 0 7,055 (182) 213,907 CLARKDALE FIRE DISTRICT 25,683 4,057 0 1,004 (35) 30,709 CLARKDALE POLICE DEPARTMENT 120,207 7,475 (3,003) 4,480 (136) 129,023 CLIFTON FIRE DEPARTMENT 13,443 0 (1,200) 473 (58) 12,658
176 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
CLIFTON POLICE DEPARTMENT 46,572 2,024 0 1,739 (73) 50,261 COCHISE COUNTY SHERIFF'S DEPT 1,047,726 110,900 (41,203) 39,020 (982) 1,155,461 COCONINO COUNTY SHERIFF'S DEPT 580,646 66,368 (48,034) 21,637 (551) 620,065 COOLIDGE FIRE DEPARTMENT 7,834 2,565 0 307 (17) 10,688 COOLIDGE POLICE DEPARTMENT 313,053 24,101 (8,103) 11,686 (309) 340,427 CORONA DE TUCSON FIRE DISTRICT 81,222 8,474 0 3,108 (91) 92,713 COTTONWOOD FIRE DEPARTMENT 119,424 16,613 (6,240) 4,534 (121) 134,210 COTTONWOOD POLICE DEPARTMENT 256,619 22,459 (4,587) 9,703 (259) 283,935 DAISY MOUNTAIN FIRE DISTRICT 456,729 52,561 0 17,535 (437) 526,387 DEPARTMENT OF EMER & MILITARY AFF 544,909 29,728 (1,889) 20,461 (691) 592,519 DEPARTMENT OF PUBLIC SAFETY 29,365,437 1,677,462 (1,481,307) 1,082,402 (26,633) 30,617,361 DESERT HILLS FIRE DEPARTMENT 52,259 8,172 0 2,045 (62) 62,413 DOUGLAS FIRE DEPARTMENT 398,989 15,838 (12,535) 14,684 (398) 416,577 DOUGLAS POLICE DEPARTMENT 550,616 27,202 (20,312) 20,377 (529) 577,355 DREXEL HEIGHTS FIRE DISTRICT 707,023 52,118 (11,597) 26,517 (663) 773,399 EAGAR POLICE DEPARTMENT 108,503 4,943 0 4,063 (121) 117,388 EL MIRAGE FIRE DEPARTMENT 101,756 10,870 0 3,901 (105) 116,422 EL MIRAGE POLICE DEPARTMENT 246,091 25,326 (3,559) 9,432 (243) 277,047 ELOY FIRE DISTRICT 112,129 13,270 0 4,314 (117) 129,596 ELOY POLICE DEPARTMENT 289,338 17,712 (3,000) 10,857 (283) 314,623 FLAGSTAFF FIRE DEPARTMENT 2,460,038 113,930 (96,788) 90,478 (2,242) 2,565,417 FLAGSTAFF POLICE DEPARTMENT 1,367,242 98,997 (67,477) 50,878 (1,265) 1,448,376 FLORENCE FIRE DEPARTMENT 90,567 12,107 0 3,497 (96) 106,075 FLORENCE POLICE DEPARTMENT 190,234 19,199 (4,320) 7,213 (192) 212,133 FORT MCDOWELL TRIBAL FIRE DEPT. 80,785 6,196 0 3,063 (90) 89,954 FORT MCDOWELL TRIBAL POLICE DEPT. 164,789 13,575 0 6,268 (168) 184,464 FORT MOJAVE MESA FIRE DISTRICT 256,318 23,987 (10,563) 9,622 (247) 279,117 FORT MOJAVE TRIBAL POLICE DEPT. 81,993 8,223 0 3,145 (89) 93,272 FREDONIA MARSHALS 45,254 1,473 0 1,685 (71) 48,340 FRY FIRE DISTRICT 303,929 38,652 (26,297) 11,320 (291) 327,314 GAME AND FISH DEPARTMENT 2,693,679 197,866 (166,721) 99,538 (2,693) 2,821,669 GILA COUNTY SHERIFF'S DEPARTMENT 563,812 32,379 (13,827) 20,980 (545) 602,798 GILA RIVER FIRE DEPARTMENT 359,957 30,945 0 13,704 (348) 404,257 GILA RIVER POLICE DEPARTMENT 535,671 59,854 0 20,583 (516) 615,592 GILBERT FIRE DEPARTMENT 1,026,937 121,800 (3,003) 39,074 (963) 1,183,845 GILBERT POLICE DEPARTMENT 1,743,276 173,999 (29,097) 66,468 (1,634) 1,953,012 GLENDALE FIRE DEPARTMENT 3,869,512 240,503 (120,415) 143,597 (3,521) 4,129,677 GLENDALE POLICE DEPARTMENT 4,316,458 484,310 (261,914) 162,196 (3,973) 4,697,076 GLOBE FIRE DEPARTMENT 154,066 20,460 (15,480) 5,738 (158) 164,627 GLOBE POLICE DEPARTMENT 253,983 21,567 (13,453) 9,464 (258) 271,302
Comprehensive Annual Financial Report 177 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
GOLDEN SHORES FIRE DISTRICT 25,276 3,578 0 989 (34) 29,810 GOLDEN VALLEY FIRE DISTRICT 145,533 13,567 (3,600) 5,495 (149) 160,846 GOLDER RANCH FIRE DISTRICT 799,211 84,617 (20,590) 30,196 (749) 892,684 GOODYEAR FIRE DEPARTMENT 461,292 53,733 (560) 17,673 (440) 531,698 GOODYEAR POLICE DEPARTMENT 630,500 65,983 (10,558) 24,109 (601) 709,434 GRAHAM COUNTY ATTORNEY INVEST. 0 0 0 0 0 0 GRAHAM COUNTY SHERIFF'S DEPT. 197,080 12,655 (2,253) 7,407 (203) 214,687 GREEN VALLEY FIRE DISTRICT 485,412 43,939 (32,795) 17,871 (449) 513,978 GREENLEE COUNTY SHERIFF'S DEPT. 221,373 12,411 (1,200) 8,306 (228) 240,661 GROOM CREEK FIRE DISTRICT 20,474 2,744 0 795 (31) 23,982 GUADALUPE FIRE DEPARTMENT 28,357 3,802 (1,200) 1,082 (41) 32,001 HARQUAHALA FIRE DISTRICT 41,505 3,664 0 1,586 (52) 46,704 HAYDEN POLICE DEPARTMENT 39,040 6,029 0 1,576 (51) 46,594 HEBER-OVERGAARD FIRE DISTRICT 74,588 5,222 0 2,803 (84) 82,529 HELLSGATE FIRE DISTRICT 47,156 4,703 0 1,802 (55) 53,604 HIGHLANDS FIRE DISTRICT 144,292 14,537 (1,800) 5,506 (147) 162,388 HOLBROOK POLICE DEPARTMENT 200,112 11,045 (7,366) 7,386 (221) 210,956 HUACHUCA CITY POLICE DEPARTMENT 12,202 4,402 0 526 (27) 17,103 HUALAPAI INDIAN TRIBE POLICE DEPT 45,068 7,303 0 1,770 (54) 54,087 JEROME POLICE DEPARTMENT 17,795 1,630 0 681 (36) 20,069 KEARNY POLICE DEPARTMENT 37,295 3,223 (209) 1,416 (44) 41,680 KINGMAN FIRE DEPARTMENT 608,008 39,063 (7,650) 22,791 (573) 661,639 KINGMAN POLICE DEPARTMENT 513,140 45,812 (16,235) 19,301 (488) 561,530 LA PAZ COUNTY ATTY. INVESTIGATORS 11,462 0 (426) 413 (31) 11,418 LA PAZ COUNTY SHERIFF'S DEPT. 400,405 19,384 (9,873) 14,756 (388) 424,283 LAKE HAVASU CITY FIRE DEPARTMENT 1,383,186 81,763 (74,330) 50,761 (1,265) 1,440,116 LAKE HAVASU CITY POLICE DEPT. 966,285 80,248 (43,272) 36,158 (901) 1,038,518 LAKE MOHAVE RANCHOS FIRE DISTRICT 49,930 2,325 0 1,861 (66) 54,050 MAMMOTH POLICE DEPARTMENT 31,586 1,193 0 1,182 (64) 33,897 MARANA POLICE DEPARTMENT 637,639 64,555 (16,180) 24,164 (607) 709,571 MARICOPA CNTY ATTY INVESTIGATORS 240,523 20,836 (15,734) 8,990 (240) 254,375 MARICOPA COUNTY PARK RANGERS 45,939 0 (5,400) 1,593 (50) 42,083 MARICOPA COUNTY SHERIFF'S OFFICE 11,602,001 955,222 (353,079) 435,867 (10,658) 12,629,354 MAYER FIRE DISTRICT 83,158 8,755 0 3,197 (89) 95,021 MESA FIRE DEPARTMENT 7,275,464 505,725 (477,751) 266,218 (6,512) 7,563,144 MESA POLICE DEPARTMENT 10,070,551 1,136,380 (1,071,209) 369,885 (9,039) 10,496,568 MIAMI POLICE DEPARTMENT 54,536 3,346 0 2,045 (72) 59,856 MOHAVE COUNTY SHERIFF'S DEPT. 1,180,724 69,831 (20,443) 44,149 (1,101) 1,273,161 MOHAVE VALLEY FIRE DISTRICT 316,262 17,124 0 11,828 (309) 344,906 MONTEZUMA RIMROCK FIRE DISTRICT 47,412 5,122 (2,580) 1,773 (58) 51,670
178 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
MOUNT LEMMON FIRE DISTRICT 23,110 2,737 0 882 (36) 26,694 NAU CAMPUS POLICE 283,269 19,269 (18,306) 10,418 (285) 294,366 NAVAJO COUNTY ATTY'S INVESTIGATOR 7,835 0 (880) 282 (117) 7,120 NAVAJO COUNTY SHERIFF'S DEPT. 547,274 31,534 (9,350) 20,456 (538) 589,376 NOGALES FIRE DEPARTMENT 484,149 48,041 (41,080) 17,920 (458) 508,572 NOGALES POLICE DEPARTMENT 858,250 69,169 (52,840) 31,792 (802) 905,569 NORTHERN AZ. CONSOLIDATED FD #1 133,683 21,175 (4,790) 5,141 (138) 155,071 NORTHWEST FIRE DISTRICT 1,440,711 128,688 (21,290) 54,393 (1,340) 1,601,163 ORACLE FIRE DISTRICT 17,829 2,592 0 695 (31) 21,085 ORO VALLEY POLICE DEPT. 909,094 108,743 (11,704) 34,756 (863) 1,040,026 PAGE FIRE DEPARTMENT 49,397 6,172 (1,200) 1,877 (58) 56,188 PAGE POLICE DEPARTMENT 353,015 8,739 0 13,085 (357) 374,482 PALOMINAS FIRE DISTRICT 22,881 2,571 0 876 (42) 26,286 PARADISE VALLEY POLICE DEPARTMENT 410,692 55,952 (37,052) 15,249 (391) 444,451 PARKER POLICE DEPARTMENT 126,742 6,740 (750) 4,763 (140) 137,356 PASCUA YAQUI TRIBE FIRE DEPT. 144,374 15,330 0 5,551 (150) 165,105 PASCUA YAQUI TRIBE POLICE DEPT. 161,410 20,035 (3,780) 6,203 (164) 183,705 PATAGONIA MARSHALS 27,097 1,272 0 1,016 (43) 29,342 PAYSON FIRE DEPARTMENT 181,133 25,773 (19,800) 6,724 (177) 193,652 PAYSON POLICE DEPARTMENT 255,306 30,085 (23,738) 9,495 (251) 270,897 PEORIA FIRE DEPARTMENT 1,358,498 109,185 (13,597) 51,171 (1,260) 1,503,997 PEORIA POLICE DEPARTMENT 1,667,318 141,969 (59,248) 62,848 (1,547) 1,811,341 PHOENIX FIRE DEPARTMENT 34,642,713 1,792,299 (1,572,718) 1,270,963 (31,028) 36,102,228 PHOENIX POLICE DEPARTMENT 60,971,639 3,474,333 (2,710,983) 2,248,054 (54,867) 63,928,176 PICTURE ROCKS FIRE DISTRICT 178,503 7,192 (5,400) 6,562 (179) 186,678 PIMA COUNTY ATTORNEY INVESTIGATOR 99,730 6,299 (3,240) 3,711 (116) 106,384 PIMA COUNTY COMM. COLLEGE POLICE 342,399 21,032 (5,717) 12,814 (339) 370,189 PIMA COUNTY SHERIFF'S DEPARTMENT 7,458,489 568,616 (376,541) 276,690 (6,771) 7,920,483 PIMA POLICE DEPARTMENT 21,559 1,647 0 818 (41) 23,984 PINAL COUNTY SHERIFF'S DEPARTMENT 2,113,824 156,570 (57,034) 79,226 (1,952) 2,290,633 PINE-STRAWBERRY FIRE DISTRICT 169,362 8,785 (1,993) 6,296 (170) 182,280 PINETOP FIRE DISTRICT 136,513 14,835 (3,240) 5,169 (138) 153,139 PINETOP-LAKESIDE POLICE DEPT. 88,629 11,670 (7,563) 3,318 (99) 95,955 PINEWOOD FIRE DISTRICT 36,269 9,064 (3,780) 1,423 (41) 42,934 PONDEROSA FIRE DISTRICT 2,462 2,667 0 132 (29) 5,232 PRESCOTT FIRE DEPARTMENT 1,070,841 93,168 (49,117) 40,206 (1,066) 1,154,032 PRESCOTT POLICE DEPARTMENT 733,379 75,339 (63,937) 27,215 (688) 771,308 PRESCOTT VALLEY POLICE DEPARTMENT 505,727 45,845 (9,257) 19,114 (481) 560,948 QUARTZSITE FIRE DISTRICT 34,242 3,831 0 1,314 (45) 39,343 QUARTZSITE POLICE DEPARTMENT 105,979 5,830 (2,835) 3,944 (111) 112,806
Comprehensive Annual Financial Report 179 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
QUEEN CREEK FIRE DEPARTMENT 58,485 68,365 (3,120) 2,403 (67) 126,066 QUEEN VALLEY FIRE DISTRICT 9,479 1,639 0 375 (25) 11,468 RINCON VALLEY FIRE DISTRICT 134,279 16,382 (150) 5,165 (139) 155,538 RIO RICO FIRE DISTRICT 120,144 14,153 0 4,629 (127) 138,800 RIO VERDE FIRE DISTRICT 94,548 16,576 (1,871) 3,683 (99) 112,837 SAFFORD POLICE DEPARTMENT 251,529 26,910 (12,420) 9,439 (254) 275,204 SAHUARITA POLICE DEPARTMENT 215,561 41,343 (168) 8,339 (215) 264,860 SALT RIVER PIMA-MARICOPA FIRE 537,174 51,169 0 20,563 (512) 608,393 SALT RIVER PIMA-MARICOPA POLICE 564,677 61,962 (14,387) 21,554 (538) 633,268 SAN CARLOS TRIBAL POLICE DEPT. 107,842 9,738 0 4,144 (116) 121,607 SAN LUIS FIRE DEPARTMENT 153,643 15,238 0 5,856 (159) 174,579 SAN LUIS POLICE DEPARTMENT 235,539 20,193 (4,063) 8,952 (237) 260,384 SANTA CRUZ COUNTY SHERIFF'S DEPT. 406,846 29,168 (7,295) 15,307 (400) 443,625 SCOTTSDALE FIRE DEPARTMENT 1,029,601 151,927 (10,606) 38,404 (944) 1,208,382 SCOTTSDALE POLICE DEPARTMENT 5,738,894 444,529 (251,437) 214,117 (5,240) 6,140,863 SEDONA FIRE DISTRICT 398,546 54,604 (18,556) 15,142 (379) 449,357 SEDONA POLICE DEPARTMENT 244,383 19,510 (1,800) 9,259 (244) 271,108 SHOW LOW POLICE DEPARTMENT 319,260 25,197 (4,887) 12,062 (315) 351,317 SIERRA VISTA FIRE DEPARTMENT 529,961 49,583 (46,675) 19,374 (489) 551,753 SIERRA VISTA POLICE DEPARTMENT 667,118 68,323 (85,823) 24,237 (609) 673,246 SNOWFLAKE POLICE DEPARTMENT 112,468 9,927 (1,626) 4,270 (126) 124,913 SOMERTON FIRE DEPARTMENT 114,225 9,981 (1,800) 4,316 (123) 126,600 SOMERTON POLICE DEPARTMENT 172,162 14,637 (1,800) 6,521 (179) 191,340 SONOITA ELGIN FIRE DEPARTMENT 29,052 3,606 0 1,117 (46) 33,730 SOUTH TUCSON FIRE DEPARTMENT 79,994 4,939 (5,200) 2,913 (93) 82,553 SOUTH TUCSON POLICE DEPARTMENT 87,891 13,001 (7,176) 3,305 (244) 96,777 SPRINGERVILLE POLICE DEPARTMENT 91,836 4,817 0 3,446 (106) 99,993 ST. JOHNS POLICE DEPARTMENT 53,992 3,224 0 2,032 (71) 59,177 SUMMIT FIRE DISTRICT 248,253 22,002 (2,100) 9,410 (242) 277,323 SUN CITY FIRE DISTRICT 780,748 57,695 (45,841) 28,830 (719) 820,713 SUN CITY WEST FIRE DISTRICT 382,570 57,058 (27,044) 14,433 (362) 426,655 SUN LAKES FIRE DISTRICT 302,720 29,067 (7,496) 11,412 (288) 335,415 SUN SITES PEARCE FIRE DISTRICT 10,616 2,461 0 428 (19) 13,485 SUPERIOR POLICE DEPARTMENT 77,002 5,955 0 2,920 (101) 85,776 SURPRISE FIRE DEPARTMENT 608,226 75,348 (11,010) 23,161 (575) 695,151 SURPRISE POLICE DEPARTMENT 788,023 103,805 (26,468) 30,390 (754) 894,997 TEMPE FIRE DEPARTMENT 3,557,523 205,916 (205,200) 130,093 (3,194) 3,685,139 TEMPE POLICE DEPARTMENT 3,861,192 420,241 (362,706) 142,785 (3,498) 4,058,015 THATCHER POLICE DEPARTMENT 181,611 8,966 (1,200) 6,796 (194) 195,979 THREE POINTS FIRE DISTRICT 84,348 9,958 (3,030) 3,213 (94) 94,396
180 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 PSPRS SYSTEM BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
TIMBER MESA FIRE AND MEDICAL DIST 276,140 50,816 (2,099) 10,826 (315) 335,369 TOHONO O'ODHAM NATION FIRE DEPT. 162,767 21,499 0 6,346 (165) 190,447 TOHONO O'ODHAM NATION POLICE DEPT 441,640 47,079 (3,243) 16,966 (425) 502,017 TOLLESON FIRE DEPARTMENT 231,616 22,080 (4,920) 8,739 (225) 257,289 TOLLESON POLICE DEPARTMENT 222,424 20,165 (7,425) 8,438 (224) 243,378 TOMBSTONE MARSHAL'S DEPARTMENT 48,786 1,652 0 1,817 (68) 52,187 TONOPAH VALLEY FIRE DISTRICT 38,617 5,119 0 1,503 (57) 45,183 TOWN OF SUPERIOR (FIRE DEPT) 26,417 3,107 (1,200) 998 (45) 29,278 TRI-CITY FIRE DISTRICT 85,456 10,735 0 3,309 (94) 99,405 TUBAC FIRE DISTRICT 173,248 14,727 0 6,590 (176) 194,389 TUCSON AIRPORT AUTHORITY FIRE DPT 301,918 16,507 (8,940) 11,204 (299) 320,391 TUCSON AIRPORT AUTHORITY POLICE 254,819 19,980 (11,143) 9,531 (256) 272,930 TUCSON FIRE 10,859,037 860,918 (897,108) 395,702 (9,678) 11,208,870 TUCSON POLICE 15,782,492 1,432,541 (1,438,343) 577,020 (14,099) 16,339,612 U OF A CAMPUS POLICE DEPARTMENT 474,458 59,039 (26,158) 18,037 (548) 524,829 VERDE VALLEY FIRE DISTRICT 243,451 16,471 (2,940) 9,121 (238) 265,865 WELLTON POLICE 45,884 1,932 0 1,716 (70) 49,462 WHETSTONE FIRE DISTRICT 14,943 1,701 0 576 (31) 17,190 WICKENBURG FIRE DEPARTMENT 34,091 7,453 0 1,347 (46) 42,845 WICKENBURG POLICE DEPARTMENT 143,835 13,255 (6,690) 5,385 (154) 155,631 WILLCOX POLICE DEPARTMENT 112,162 8,908 (1,800) 4,239 (127) 123,383 WILLIAMS POLICE DEPARTMENT 91,663 5,368 (1,800) 3,419 (108) 98,542 WILLIAMSON VALLEY FIRE DISTRICT 22,860 7,358 0 948 (37) 31,128 WINSLOW FIRE DEPARTMENT 257,096 5,932 (1,650) 9,474 (248) 270,604 WINSLOW POLICE DEPARTMENT 291,810 18,435 (5,100) 10,909 (288) 315,766 WITTMANN FIRE DISTRICT 25,806 4,526 0 1,011 (37) 31,306 YAVAPAI CNTY ATTRNY INVESTIGATORS 17,007 0 (1,200) 603 58 16,468 YAVAPAI COUNTY SHERIFF'S DEPT. 1,009,193 108,194 (47,659) 38,171 (950) 1,106,947 YAVAPAI PRESCOTT TRIBAL POLICE 25,944 2,110 0 984 (40) 28,998 YOUNGTOWN POLICE DEPARTMENT 53,041 1,807 (837) 1,957 (80) 55,888 YUMA COUNTY SHERIFF'S DEPARTMENT 899,518 58,466 (11,660) 33,818 (847) 979,295 YUMA FIRE DEPARTMENT 1,598,565 119,425 (70,275) 59,406 (1,471) 1,705,650 YUMA POLICE DEPARTMENT 2,583,165 144,947 (61,119) 96,241 (2,372) 2,760,862
TOTALS 290,928,475 21,480,853 (14,242,153) 10,779,154 (268,720) 308,677,610
Comprehensive Annual Financial Report 181 STATISTICAL SECTION
OPERATING INFORMATION
SCHEDULE OF CHANGES IN HEALTH INSURANCE RESERVE BALANCES FISCAL YEAR ENDED JUNE 30, 2015
2014 CONTRIB SUBSIDY DIST. OF DIST. OF 2015 CORP PLAN BALANCES RECEIVED BENEFITS EARNINGS ADMIN EXP BALANCES
ADMIN. OFFICE OF THE COURT (CORP-AOC) 6,311,556 1,378,298 (318,262) 251,079 (5,784) 7,616,887 APACHE COUNTY - CORP 151,820 6,742 (796) 5,698 (184) 163,280 CITY OF AVONDALE - DETENTION 23,059 3,769 0 914 (31) 27,711 CITY OF SOMERTON - DISPATCHERS 14,159 1,742 0 552 (27) 16,426 COCHISE COUNTY - CORP 570,744 25,720 (1,896) 21,434 (572) 615,430 COCONINO COUNTY - CORP 397,932 31,583 (8,163) 15,066 (395) 436,023 DEPARTMENT OF CORRECTIONS - CORP 66,387,146 4,306,279 (2,484,158) 2,485,051 (61,633) 70,632,685 DEPARTMENT OF PUBLIC SAFETY 136,406 25,299 (16,534) 5,232 (177) 150,226 DEPARTMENT OF PUBLIC SAFETY DETENTION 1,419 168 0 55 (122) 1,520 DEPT OF JUVENILE CORRECTIONS-CORP 5,635,764 301,957 (196,963) 209,756 (5,442) 5,945,072 GILA COUNTY - CORP 270,740 23,280 (2,890) 10,328 (282) 301,176 GILA COUNTY - DISPATCHERS 74,468 2,697 0 2,789 (92) 79,862 GRAHAM COUNTY - DETENTION 60,917 6,357 (2,580) 2,334 (71) 66,957 GRAHAM COUNTY - DISPATCHERS 15,029 1,154 0 573 (26) 16,730 MARICOPA COUNTY - CORP 13,729,224 968,307 (204,096) 519,361 (12,858) 14,999,938 MOHAVE COUNTY - CORP 535,525 33,400 (3,139) 20,268 (532) 585,523 NAVAJO COUNTY - CORP 299,777 14,526 (1,560) 11,278 (313) 323,707 ORO VALLEY - DISPATCHERS 77,903 4,373 (1,662) 2,921 (96) 83,440 PIMA COUNTY - CORP 3,223,468 255,996 (131,840) 120,736 (3,009) 3,465,351 PINAL COUNTY - CORP 1,143,713 80,916 (9,010) 43,542 (1,094) 1,258,067 PINAL COUNTY - DISPATCHERS 128,577 4,464 0 4,820 (153) 137,708 SANTA CRUZ COUNTY - CORP 195,753 6,481 (248) 7,330 (214) 209,101 TOWN OF MARANA - DISPATCHERS 30,221 3,164 0 1,169 (42) 34,512 TOWN OF WICKENBURG-DISPATCHERS 32,899 1,470 (50) 1,237 (62) 35,494 YAVAPAI COUNTY - CORP 964,504 52,473 (4,567) 36,418 (934) 1,047,893 YAVAPAI COUNTY - DISPATCHERS 19,488 1,756 0 750 (30) 21,964 YUMA COUNTY - CORP 891,009 44,764 (3,553) 33,586 (859) 964,946
TOTALS 101,323,221 7,587,137 (3,391,969) 3,814,278 (95,035) 109,237,632
182 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
PSPRS PARTICIPATING EMPLOYERS
AK CHIN INDIAN COMM. FIRE DEPT. CLIFTON POLICE DEPARTMENT GOLDEN SHORES FIRE DISTRICT AK CHIN INDIAN COMM. POLICE DEPT. COCHISE COUNTY SHERIFF'S DEPT GOLDEN VALLEY FIRE DISTRICT APACHE COUNTY SHERIFF'S DEPT. COCONINO COUNTY SHERIFF'S DEPT GOLDER RANCH FIRE DISTRICT APACHE JUNCTION FIRE DISTRICT COOLIDGE FIRE DEPARTMENT GOODYEAR FIRE DEPARTMENT APACHE JUNCTION POLICE DEPARTMENT COOLIDGE POLICE DEPARTMENT GOODYEAR POLICE DEPARTMENT ARIZONA STATE PARK RANGERS CORONA DE TUCSON FIRE DISTRICT GRAHAM COUNTY ATTORNEY INVEST. ASU PD PSPRS LOCAL BOARD COTTONWOOD FIRE DEPARTMENT GRAHAM COUNTY SHERIFF'S DEPT. ATTORNEY GENERAL INVESTIGATORS COTTONWOOD POLICE DEPARTMENT GREEN VALLEY FIRE DISTRICT AVONDALE FIRE DEPARTMENT DAISY MOUNTAIN FIRE DISTRICT GREENLEE CNTY ATTY INVESTIGATORS AVONDALE POLICE DEPARTMENT DEPARTMENT OF EMER & MILITARY AFF GREENLEE COUNTY SHERIFF'S DEPT. AVRA VALLEY FIRE DISTRICT DEPARTMENT OF PUBLIC SAFETY GROOM CREEK FIRE DISTRICT AZ DPT. LIQ. LIC. & CONTROL INVST DESERT HILLS FIRE DEPARTMENT GUADALUPE FIRE DEPARTMENT BENSON FIRE DEPARTMENT DOUGLAS FIRE DEPARTMENT HARQUAHALA FIRE DISTRICT BENSON POLICE DEPARTMENT DOUGLAS POLICE DEPARTMENT HAYDEN POLICE DEPARTMENT BISBEE FIRE DEPARTMENT DREXEL HEIGHTS FIRE DISTRICT HEBER-OVERGAARD FIRE DISTRICT BISBEE POLICE DEPARTMENT EAGAR POLICE DEPARTMENT HELLSGATE FIRE DISTRICT BLACK CANYON FIRE DISTRICT EL MIRAGE FIRE DEPARTMENT HIGHLANDS FIRE DISTRICT BUCKEYE FIRE DEPARTMENT EL MIRAGE POLICE DEPARTMENT HOLBROOK POLICE DEPARTMENT BUCKEYE POLICE DEPARTMENT ELOY FIRE DISTRICT HUACHUCA CITY POLICE DEPARTMENT BUCKEYE VALLEY FIRE DISTRICT ELOY POLICE DEPARTMENT HUALAPAI INDIAN TRIBE POLICE DEPT BUCKSKIN FIRE DISTRICT FLAGSTAFF FIRE DEPARTMENT JEROME POLICE DEPARTMENT BULLHEAD CITY FIRE DEPARTMENT FLAGSTAFF POLICE DEPARTMENT KEARNY POLICE DEPARTMENT BULLHEAD CITY POLICE DEPARTMENT FLORENCE FIRE DEPARTMENT KINGMAN FIRE DEPARTMENT CAMP VERDE FIRE DISTRICT FLORENCE POLICE DEPARTMENT KINGMAN POLICE DEPARTMENT CAMP VERDE MARSHALL'S FORT MCDOWELL TRIBAL FIRE DEPT. LA PAZ COUNTY ATTY. INVESTIGATORS CASA GRANDE FIRE DEPARTMENT FORT MCDOWELL TRIBAL POLICE DEPT. LA PAZ COUNTY SHERIFF'S DEPT. CASA GRANDE POLICE DEPARTMENT FORT MOJAVE MESA FIRE DISTRICT LAKE HAVASU CITY FIRE DEPARTMENT CAVE CREEK MARSHALS FORT MOJAVE TRIBAL POLICE DEPT. LAKE HAVASU CITY POLICE DEPT. CENTRAL AZ. COLLEGE POLICE DEPT. FREDONIA MARSHALS LAKE MOHAVE RANCHOS FIRE DISTRICT CENTRAL YAVAPAI FIRE DISTRICT FRY FIRE DISTRICT MAMMOTH POLICE DEPARTMENT CHANDLER FIRE DEPARTMENT GAME AND FISH DEPARTMENT MARANA POLICE DEPARTMENT CHANDLER POLICE DEPARTMENT GILA COUNTY SHERIFF'S DEPARTMENT MARICOPA CNTY ATTY INVESTIGATORS CHINO VALLEY FIRE DISTRICT GILA RIVER FIRE DEPARTMENT MARICOPA COUNTY PARK RANGERS CHINO VALLEY POLICE DEPARTMENT GILA RIVER POLICE DEPARTMENT MARICOPA COUNTY SHERIFF'S OFFICE CHRISTOPHER-KOHL'S FIRE DISTRICT GILBERT FIRE DEPARTMENT MAYER FIRE DISTRICT CITY OF MARICOPA - FIRE GILBERT POLICE DEPARTMENT MESA FIRE DEPARTMENT CITY OF MARICOPA (POLICE DEPT.) GLENDALE FIRE DEPARTMENT MESA POLICE DEPARTMENT CLARKDALE FIRE DISTRICT GLENDALE POLICE DEPARTMENT MIAMI FIRE DEPARTMENT - GONE CLARKDALE POLICE DEPARTMENT GLOBE FIRE DEPARTMENT MIAMI POLICE DEPARTMENT CLIFTON FIRE DEPARTMENT GLOBE POLICE DEPARTMENT MOHAVE COUNTY SHERIFF'S DEPT.
Comprehensive Annual Financial Report 183 STATISTICAL SECTION
OPERATING INFORMATION
PSPRS PARTICIPATING EMPLOYERS
MOHAVE VALLEY FIRE DISTRICT QUARTZSITE FIRE DISTRICT THATCHER POLICE DEPARTMENT MONTEZUMA RIMROCK FIRE DISTRICT QUARTZSITE POLICE DEPARTMENT THREE POINTS FIRE DISTRICT MOUNT LEMMON FIRE DISTRICT QUEEN CREEK FIRE DEPARTMENT TIMBER MESA FIRE AND MEDICAL DIST NAU CAMPUS POLICE QUEEN VALLEY FIRE DISTRICT TOHONO O'ODHAM NATION FIRE DEPT. NAVAJO COUNTY ATTY'S INVESTIGATOR RINCON VALLEY FIRE DISTRICT TOHONO O'ODHAM NATION POLICE DEPT NAVAJO COUNTY SHERIFF'S DEPT. RIO RICO FIRE DISTRICT TOLLESON FIRE DEPARTMENT NOGALES FIRE DEPARTMENT RIO VERDE FIRE DISTRICT TOLLESON POLICE DEPARTMENT NOGALES POLICE DEPARTMENT SAFFORD POLICE DEPARTMENT TOMBSTONE MARSHAL'S DEPARTMENT NORTHERN AZ. CONSOLIDATED FD #1 SAHUARITA POLICE DEPARTMENT TONOPAH VALLEY FIRE DISTRICT NORTHWEST FIRE DISTRICT SALT RIVER PIMA-MARICOPA FIRE TOWN OF SUPERIOR (FIRE DEPT) ORACLE FIRE DISTRICT SALT RIVER PIMA-MARICOPA POLICE TRI-CITY FIRE DISTRICT ORO VALLEY POLICE DEPT. SAN CARLOS TRIBAL POLICE DEPT. TUBAC FIRE DISTRICT PAGE FIRE DEPARTMENT SAN LUIS FIRE DEPARTMENT TUCSON AIRPORT AUTHORITY FIRE DPT PAGE POLICE DEPARTMENT SAN LUIS POLICE DEPARTMENT TUCSON AIRPORT AUTHORITY POLICE PALOMINAS FIRE DISTRICT SANTA CRUZ COUNTY SHERIFF'S DEPT. TUCSON FIRE PARADISE VALLEY POLICE DEPARTMENT SCOTTSDALE FIRE DEPARTMENT TUCSON POLICE PARKER POLICE DEPARTMENT SCOTTSDALE POLICE DEPARTMENT U OF A CAMPUS POLICE DEPARTMENT PASCUA YAQUI TRIBE FIRE DEPT. SEDONA FIRE DISTRICT VERDE VALLEY FIRE DISTRICT PASCUA YAQUI TRIBE POLICE DEPT. SEDONA POLICE DEPARTMENT WELLTON POLICE PATAGONIA MARSHALS SHOW LOW POLICE DEPARTMENT WHETSTONE FIRE DISTRICT PAYSON FIRE DEPARTMENT SIERRA VISTA FIRE DEPARTMENT WICKENBURG FIRE DEPARTMENT PAYSON POLICE DEPARTMENT SIERRA VISTA POLICE DEPARTMENT WICKENBURG POLICE DEPARTMENT PEORIA FIRE DEPARTMENT SNOWFLAKE POLICE DEPARTMENT WILLCOX POLICE DEPARTMENT PEORIA POLICE DEPARTMENT SOMERTON FIRE DEPARTMENT WILLIAMS POLICE DEPARTMENT PHOENIX FIRE DEPARTMENT SOMERTON POLICE DEPARTMENT WILLIAMSON VALLEY FIRE DISTRICT PHOENIX POLICE DEPARTMENT SONOITA ELGIN FIRE DEPARTMENT WINSLOW FIRE DEPARTMENT PICTURE ROCKS FIRE DISTRICT SOUTH TUCSON FIRE DEPARTMENT WINSLOW POLICE DEPARTMENT PIMA COUNTY ATTORNEY INVESTIGATOR SOUTH TUCSON POLICE DEPARTMENT WITTMANN FIRE DISTRICT PIMA COUNTY COMM. COLLEGE POLICE SPRINGERVILLE POLICE DEPARTMENT YAVAPAI CNTY ATTRNY INVESTIGATORS PIMA COUNTY SHERIFF'S DEPARTMENT ST. JOHNS POLICE DEPARTMENT YAVAPAI COUNTY SHERIFF'S DEPT. PIMA POLICE DEPARTMENT SUMMIT FIRE DISTRICT YAVAPAI PRESCOTT TRIBAL POLICE PINAL COUNTY SHERIFF'S DEPARTMENT SUN CITY FIRE DISTRICT YOUNGTOWN POLICE DEPARTMENT PINE-STRAWBERRY FIRE DISTRICT SUN CITY WEST FIRE DISTRICT YUMA COUNTY SHERIFF'S DEPARTMENT PINETOP FIRE DISTRICT SUN LAKES FIRE DISTRICT YUMA FIRE DEPARTMENT PINETOP-LAKESIDE POLICE DEPT. SUN SITES PEARCE FIRE DISTRICT YUMA POLICE DEPARTMENT PINEWOOD FIRE DISTRICT SUPERIOR POLICE DEPARTMENT PONDEROSA FIRE DISTRICT SURPRISE FIRE DEPARTMENT PRESCOTT FIRE DEPARTMENT SURPRISE POLICE DEPARTMENT PRESCOTT POLICE DEPARTMENT TEMPE FIRE DEPARTMENT PRESCOTT VALLEY POLICE DEPARTMENT TEMPE POLICE DEPARTMENT
184 Comprehensive Annual Financial Report STATISTICAL SECTION
OPERATING INFORMATION
EORP PARTICIPATING EMPLOYERS
STATE OF ARIZONA CITY OF APACHE JUNCTION TOWN OF GILBERT APACHE COUNTY CITY OF AVONDALE TOWN OF MARANA COCHISE COUNTY CITY OF CHANDLER TOWN OF SAHUARITA COCONINO COUNTY CITY OF FLAGSTAFF TOWN OF THATCHER GILA COUNTY CITY OF GLENDALE GRAHAM COUNTY CITY OF GLOBE GREENLEE COUNTY CITY OF MESA LA PAZ COUNTY CITY OF PEORIA MARICOPA COUNTY CITY OF PHOENIX MOHAVE COUNTY CITY OF SAFFORD NAVAJO COUNTY CITY OF SCOTTSDALE PIMA COUNTY CITY OF SOUTH TUCSON PINAL COUNTY CITY OF SURPRISE SANTA CRUZ COUNTY CITY OF TEMPE YAVAPAI COUNTY CITY OF TOLLESON YUMA COUNTY CITY OF TUCSON CITY OF YUMA
CORP PARTICIPATING EMPLOYERS
DEPARTMENT OF CORRECTIONS APACHE COUNTY - DETENTION OFFICERS GILA COUNTY - DISPATCHERS DEPARTMENT OF JUVENILE CORRECTIONS COCHISE COUNTY - DETENTION OFFICERS GRAHAM COUNTY - DISPATCHERS APACHE COUNTY - AOC COCONINO COUNTY - DETENTION OFFICERS PINAL COUNTY - DISPATCHERS COCHISE COUNTY - AOC GILA COUNTY - DETENTION OFFICERS YAVAPAI COUNTY - DISPATCHERS COCONINO COUNTY - AOC GRAHAM COUNTY - DETENTION OFFICERS CITY OF SOMERTON - DISPATCHERS GILA COUNTY - AOC MARICOPA COUNTY - DETENTION OFFICERS TOWN OF MARANA - DISPATCHERS GRAHAM COUNTY - AOC MOHAVE COUNTY - DETENTION OFFICERS TOWN OF ORO VALLEY - DISPATCHERS GREENLEE COUNTY - AOC NAVAJO COUNTY - DETENTION OFFICERS TOWN OF WICKENBURG - DISPATCHERS LA PAZ COUNTY - AOC PIMA COUNTY - DETENTION OFFICERS DEPARTMENT OF PUBLIC SAFETY - DISPATCHERS MARICOPA COUNTY - AOC PINAL COUNTY - DETENTION OFFICERS MOHAVE COUNTY - AOC SANTA CRUZ COUNTY - DETENTION OFFICERS NAVAJO COUNTY - AOC YAVAPAI COUNTY - DETENTION OFFICERS PIMA COUNTY - AOC YUMA COUNTY - DETENTION OFFICERS PINAL COUNTY - AOC CITY OF AVONDALE - DETENTION OFFICERS SANTA CRUZ COUNTY - AOC DEPARTMENT OF PUBLIC SAFETY - DETENTION YAVAPAI COUNTY - AOC YUMA COUNTY - AOC
Comprehensive Annual Financial Report 185 STATISTICAL SECTION
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186 Comprehensive Annual Financial Report